Were decoupling 2. 27 . 30year at 3 . Fiveyear at 2. 6. And i go through all of those to highlight the yield is steepening and continues to do so. Global yields, this is getting interesting. Italian tenyear, 2. 21 . Its moved 18 basis points in a day. You see the biggest weekly rise, oneweek rise for the italian, german and french tenyear yield, we have seen it happen the highest in years. How long . 30 years. But all the strategists said probably five years four or five years ago we were wait iin. Here we are. What was happening the entire time that rates were not going up . We were sub2 . We were stuck in the muck, basically. The greatest thing, i mean, to see the stock market hitting new highs while rates are surging, if youre at zero on rates and sooner or later you have to normalize, if rising rates are going to move into financial assets, you have a problem with stocks going down. Unless you decouple. Rates are going up for good reason, then the stocks go up at the same time. You have Something Else to underline. I think for months if not years or the last year, the european yields have been leading u. S. Yields and now its reversed. Now as the u. S. Yields rise in response to what youre saying, higher growth and expectations, if youre going to get 2 in the u. S. Tenyear, everybody else in the world has got to pay more because that is the rate of return. So everybody else has to compete. Nobody else would buy the other debt. But how much do you think the upcoming italian referendum has to do with the current move in yields because Deutsche Bank is putting a 60 profitability on a rejection of referendum, but i dont think we trust any strategist at this point. Heres what i think about the referendum, this is the one where they actually are like, this is going to to go against the european. Maybe theyre wrong. Maybe this is the nonbrexit. Everybody assumes this is another brexit moment. Europe is not what is causing what is happening here. Maybe this reverses itself. Maybe people are ahead of themselves based on a guy that is only elected. Hes president elect and all this happens in a week . The opposite of what was predicted to happen, but this much of an opposite . I mean, and so you wonder, could the United States really start meeting again in terms of Interest Rates, Economic Activity and stock markets, just because a guy gets elected . Even before the election, our Interest Rates as low as they were were still among the highest in the world. Our growth is still better than elsewhere. We thought we were between 1. 5 and 1. 7 forever. I think youre right, the rate of change since the election is dramatic and stands out. A lot of pent up energy in the, ma. Heres other big corporate stories we are watching today. Some news with siemens buying mentor for 37. 25 a share. The deal is valued at 4. 5 billion. Thats including debt. Mentor sells hardware and Software Design automation tools used in developing and testing lek tropic systems. S Samsung Electronics is acquiring Harman International industries. The deal is valued at 112 per share in cash or 8 billion. Thats a 28 premium. And it is samsungs biggest acquisition in itself history. The South Korean Electronics giant says harman will operate as a standalone subsidiary and plans to keep the companys workforce headquarters and facilities. Take a look at where harman is unchanged in premarket trading, but it is interesting samsung is going the acquisition route among the cloudy Corporate Structure and all the troubles in the electronics recently. And American Apparel filed for the second bankruptcy protection in just over a year. This news comes at the retailer has faced heavy competition and a rocky relationship with its founder. The clothing maker listed assets and liabilities in the range of 100 million to half a billion dollars according to a court filing. Separately, gilden activewear agreed to buy intellectual Property Rights related to American Apparel but not the retail stores, of which American Apparel had quite a few when it first opened. Harmans probably halted. The bid is 109, it closed at 87. The ask is 112. Speakers, right . Really good speakers. Yes, audio car speakers. That is for people who still have a car or find the need for a car. Or need to you did. You rode on uber. I did ride on uber. Its definitely peaked. Its a pretty crappy car. Compared to a taxi . I took a taxi back yesterday because i didnt feel like figuring out the uber. And it was three times more. The taxi is a lot more expensive. Normally you cant get a taxi to take you from new jersey. The train station in newark. But the crappy car, some of the cars. They are like toyota camrys. This was like an old buick regal. That is an outliar. I had a 4. 8. It probably had nothing to do with the car. He was probably a nice guy. You sound like al gore. He had a 76 was it uber x or black . I dont know. My daughter booked it. A busy week for fed speak. Well hear from dallas, richmond and San Francisco fed president s. You know, the election is over, but at least this still happens. You know what i mean . I thought i was tired of the election. But who could ever tire of these guys . Look at them all. One, two, three, four, every single day at least two. Who doesnt want to hear from at least three of those guys per day . Because they some day they may actually raise Interest Rates a point. It needs some strengthening. We need to talk about that and need to kick that around a little. They have kicked that around for at least a couple more months. I played devils advocate in the past to say maybe the fed has to lay it out so clearly because people have either chased the yield curve or chased the asset class down into destressed debt and need time to unwind some liquid investments. I hope we can know what to plan for. What would happen . On tuesday vice chair stanley will speak along with two others. On tuesday we have two speakers as well. We have the fed speak on wednesday and the Consumer Price index on thursday. Steve bannon will be the senior counselor to the president. Bannon was the president of conservative breitbart news. And Reince Priebus is the white house chief of staff. Did any of you notice that he was head of the rnc . So basically he just added some vowels. Right . The rnc, put an e he was boorn to be the leade, i see. He got to the rnc, what can my name be . R n it is embedded in his first name, the rnc. Does he have to change his name now . No. The bottom of the hour, were going to talk is this me still . No, its good. Were going to talk to craig fuller at the bottom of the hour. He served as cochair to george w. H. Bushs Transition Team and has advice for the president elect. Do you think im going to steal it from you after what i have seen from you in the past . I count my words. I have not witnessed that. I get up at 4 00 in the morning for this show. I want to read some copy, okay . I get up at the same time. Go ahead. You can have all of mine. What do they call luck being the intersection of hard work and destiny. Love comes to those who work their butts off. Im lucky. Yesterday i ran into one politician who probably wont have a spot in trumps cabinet. Senator bernie sanders. I had a weekend with bernie. Now, for all you people out there that are saying, first class no, no, no, no. It was not first class. You were going down to interview his press secretary . No, i came back. I would not take that job. You know, its hard, but you think im going to listen to the Mainstream Media question more Mainstream Media to question people about trump . I do that here, mainstream immediate xwmedia questions about trump. But i do get lucky. This was another one. Everywhere i go i run into people that im excited about. Did you see that one, too . I was here that morning that you displayed it, yes. And everybody is always smiling. We dont have a good name for bernie like we have for her. Shes got two. Hiawatha. Do you like that one . Its okay. Other people use it. Im afraid to im still politically correct. But yeah, bernie, i went up to him, he was very nice. And one of his staffers was there. Hes been on the show before. Did he ask to take a selfie with you as well . To be perfectly honest, my daughter who is in the conservative club at her school, though a lot of her friends are not, and he is their absolute idol. And she said, all my friends would love that. And she gets along, i dont know how, she gets along with all of them. That was very important. But it was very weird. I turned around after the election season, hes two people back in line to get on the sail flight. No secret service . No, hes just very nice, mr. Sanders. Senator. Mrs. Sanders. I thought you said mr. Sanders, sorry. Mike santolli has a new piece on the bulls bet on the trump presidency. I assume that is on cnbc. Com. He is joining us now. Cnbc. Com pro. You guys are talking about this new story line attached to the s p 500. We have had big rallies off an election shock, but theres definitely Something Different about this one. And the storyline as well as the violent rotation that has kind of taken place along with it has been different heres what is going on, obviously the markets rush to price in when you see the progrowth policies in the coming year. Cyclicals, its a renation trade. So nominal growth will be higher. The markets are suggesting that obviously the bond and stock market is doing that. We had a rush from big stocks to small stocks, from same stocks to risky stocks. Thats all going on below the surface. Maybe this is finally nobody talks about the great rotation from stocks to bonds, maybe now we get one. And the market is saying lets not worry too much about the stuff we dont potentially like, like trade barriers and other things, which maybe there doesnt seem to be as much of a direct line as least to those things happening. The question is, can you believe it . What might be the pitfalls or maybe its gone a little fast in some directions. The direct infrastructure plays seem to be running hot whether it is copper or shares of caterpillar. And are we going to be talking pretty soon about the fed having to move or wanting to move faster . This could help you get higher mom mall growth, nominal growth. I have been coming down on the idea that its a high data environment. That means a wider range of outcomes, that concludes the upside risk as well as potentially more volatility attached to policy as it comes out and develops. Lets get cyclical is that its hard to resist that one. Its a market of my generation, i think. I might have had the album cover. She was hot. She was cute. But for halloween, that was the clothes yous you used to we the leg warmers and the headband, yeah. They are a particular brand and color of neon. I had a sick vision just for an instant of that. We have to plan this better. For more on the markets, lets bring in steven weiss ean i think of our past conversations, am i wrong that you never you are both steve. Shoot. You never want to raise Interest Rates, do you . The things are so bad and its working for us and weve got such great economic dont ever raise them, thats your vie . The environment we were locked in to before with the potential fiscal policy and monetary policy, yes. The question now as you kind of indicated is have we shot the first and second questions later . Thats a big risk and this does indicate that is there potential for the fed to do anything earlier than anticipated. All i know is that they tend to move further than anticipated and create a very Good Opportunity on the other side. And they take economic hostage along the way. Remember, we have a 600 billion structuraldeficit. Youre going to add 850 billion. That will affect the longterm Interest Rates. The currency goes up dramatically. A lot of the conversation hasnt been about currency, but it goes directly to the incourt potential to bring up the whole trade implication side of this. Because where is the yuan going to go . My colleague in hong kong wouldnt be surprised to see the yuan down to 7. 9. These things are all going to have reciprocal reaction. They finally get the value. Exactly correct. When the market moves, we give it to sort of metaphysical attribute, but there are individual players doing things. For example, bruckemiller the night of the election sold all his gold. And in animal spirit, i know the guy is just the president elect and who knows i dont know who he is going to pick for the cabinet position, but maybe everybody isnt wrong from the kneejerk reaction. We are inflating and Everything Else. A lot of people have been on the sidelines since early this summer. The sidelines for eight years. Exactly. There are things like taps reform, its significant. Thinking about repatriotization that could bring back six points to earnings. If corporate rates are lower, the numbers are huge. We are talking 12 to 20 . They might do infrastructure if they think it is their idea, you know what i mean . If they didnt have to say no to obama. And have to deal with the private sector involvement. They will find a way to do it. The infrastructure is huge as well. Hes talking about a trillion dollars. Thats harder to figure to the exactly where that flows through to equity markets, but the market is definitely focusing on the progrowth parts of the plan. At what point does the rise in Interest Rates, regardless if youre excited about the economy, at what problem is it a problem for the stock market or the bubbalicious stock market. We have a position with jpmorgan that is finally going to work out. I dont think it continues. The bond proxy is what . Telecom, bond proxies, so the companies that dont grow to pay the higher yield, those are the companies to avoid here. The pension fund is not changing tech allocation at all. Im just going to accumulate cash, see what happens with the fed in december and see what happens with 2017. The markets really not anticipating the Federal Reserve to come in in 2017. The market right now says lets cross the line to see. The Steven Ricchiuto fund has worned well since my son was 3. He would never be able to take care of mom and dad. Youre talking about your room. Okay. Okay, all right. To both of you, thank you. Coming up, its a big week for earnings reports from home depot, lowes, target and walmart. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Will your business be ready when growth presents itself . American express open cards can help you take on a new job, or fill a big order or expand your office and take on whatever comes next. Find out how American Express cards and services can help prepare you for growth at open. Com. Retail reporting season officially underway. We have seen a few of the large players, but things really ramp up this week with reports from home depot, target, walmart among others. Joining us now with a look at retails big week ahead is our cnbc contributor, pleasure to have you here, jay. Good to be here. The only thing retailers are concerned about ttp not going through but we have gotten used to that. And everybody is worried about there could be tariffs. I dont think well see that in retail. We may see that in other forms of manufacturing, but nobody thinks manufacturing is coming back to the states. So in general i think if youre a retailer, you go, wow, if tax rates are really low, the higher retail could be better. If we get higher growth, obviously the middle part is better. And so i think most retailers right now, a lot of retailers didnt vote for donald trump, but they should have because their business will be better. And now they might see that. One of them was looking at inventory supply management. He was not talking about the other side of the supply demand equation, which is demand. He wasnt convinced yet. He didnt expressly state that, lets put it that way. Is that what this quarter will be about for the retailers, Inventory Management . Yes, i have been telling my clients all along we are going to have a stronger Fourth Quarter. The Third Quarter was better than the Second Quarter. The Second Quarter was better than the first quarter. All because they have less stuff. They are doing a better job of managing the inventory process. And theyll have more weather, it cant be worse than last year. And they are looking at more jobs. They are looking at a little growth in wages. All that has been happening over time. That will culminate over the Fourth Quarter. Well see a decent Fourth Quarter in 2017. That was going to happen no matter who got elected, but i do think we may see better highend now since people are not going, oh, my god, my taxes are going up because we had seen pullback among people fending at the high end, even though they could afford to spend, they werent spending. The inventory quandary is counter intuitive with retailers having less stuff to sell, meaning sales are not as high as before. Yes, they were over inventoried, but they were optimistic about the consumer. Do you think the optimism will improve . We have not seen great top lines, but we have seen a better gross margin. So i dont think well see really strong top line growth. And i do think well see a huge shift to the internet. So some people are going to get hurt from that, but in general were going to see stronger bottom line numbers and okay top line numbers. How far in