Morning. Our road map begins with a new Gopcontrolled Senate for the first time in eight years. Implications for the rest of the president s term and the markets. Media earnings also out. Time warner lifts its outlook. We have a beat from Rupert Murdochs 21st century fox. Both stocks rising after a drubbing yesterday. And better than expected adp numbers. Well get that ahead of the big jobs number coming up on friday. But last nights midterm elections resulting in a power shift on capitol hill. Republicans retaking the senate for the first time in eight years, capturing at least seven seats and defeating democratic incumbents in states including north carolina, colorado, arkansas. The gop also strengthening its grip on the house, winning governorships in blue states like maryland and illinois. It is a stinging defeat for the president and his party, who by the way, is scheduled to hold a News Conference this afternoon and is planning to meet with congressional leaders in both parties on friday. Market last three midterms has traded higher the day after, jim. Tends to like this. Initially, i felt as the day went on from the early morning, i was like, okay, wait a second, were going to have a budget wrangling now because the government runs out of money in december. You even tweeted this, in fact. Yes, but the makeup of the republicans is not tea party. Its more mainstream, more business oriented. I think what were seeing david always loves when i make these sweeps comments. I think weve seen the High Water Mark in Government Intervention in business and the High Water Mark in personal and Corporate Taxes. Its going to make people more confident. I think thats the takeaway. Which means good things for stocks. Yeah, well, good things for stocks that do well. If someones going to say, jim, are you saying that this is the free pass to buy fire eye and trip adviser . No, you still have to deliver the numbers, but youre going to get a higher price to earnings multiple because youll have more confidence. That sounds like a very strong conclusion. I hope thats correct. We dont know. Obviously the stock market has done quite well over the last, whatever its been, six years. What about the opportunity perhaps to actually move ahead on some legislation that people would think will not happen, whether its an Energy Policy or immigration, keystone, tax reform. No. Okay. So wait a second. We get a higher confidence, but we dont get anything . We just dont have to read about them anymore. We started doing getter. Infrastructure . No. Nothing . No, none of this. Oversight of the fed. No. Keystone is dead. Transcanada is doing a workaround. This has been the least producti iive congress ever, is that right . This one will equally be. I see people buying the coal stocks. The Energy Department is going to say, listen, we like coal . What im wondering is if this new majority in the house and senate will result in some form of compromise with the white house that will end up at legislation that would be beneficial to the country as a whole. No. Okay. I just wanted to know. Youre saying its the absence of government, not the work of government. I mean, its a procorporate, antilabor government thats coming in, in congress. It could make it so perhaps there will be less rhetoric thats negative. I think well get a continuing resolution. The idea of just buying stocks off this, you have to this makes me feel more confident about the companies that are doing well and paying for their earnings. No, im not going to keystone. The president is going to suddenly like fossil fuels . Hes taken the executive reins on things that have to do with climate change. Thats not even an issue as to whether you could get a carbon tax or any of that stuff through congress. Certainly not this congress. Its just less of a factor. What, are they suddenly going to start drilling . Were trying to cut back drilling. All the issues that at one time might have been more important were kind of neutered. None of this. The president hates congress. No Corporate Tax reform . You dont think has a shot next year . Unless the president gets his way on raising personal income taxes for rich people, i dont think so. Did people suddenly get nice . Is that what happened . They got nice. No, but theres another election in two years. The republicans are going to want to show were different somehow. Yes, the defense spending will go back up. I think that will absolutely happen. But look at the action in Lockheed Martin since october 15. Those stocks correctly predicted this election. Look at the utilities that are heavy coal based. It isnt like the stocks didnt see it coming. Its the commentators didnt see it coming. The stocks were seeing it and they were right. We will see. Lockheed martin missed the quarter really badly, and the stock has done nothing but go up. It was a great puzzle until last night at 12 30. Meantime ahead of fridays october jobs number, data out this morning from adp shows that 230,000 jobs were added last month. Thats slightly above forecast, marks the seventh consecutive month in which adp said private payrolls had grown by 200,000 or more. September payrolls were revised upward, by the way. Not bad when you take the general labor picture. Theres some who argue that actually the job market is poised to break out here. No, i thought this was good. Remember, im concerned about the job growth in the oil patch. Eog put up spectacular numbers yesterday. Makes you feel better. Some people are saying, listen, that is rearview mirror. Thats when oil was 90. I think that anything that says these things smack of job creation, i want to hear more what pay checks has to say. I think Small Business will be encouraged by elections. The Small Businessman is not going to say, im going to pick up the paper and find obama has done one more thing to make it risky. Im not trying to be liberal or conservative. Maybe the days when the Justice Department calls a big bank and says, you owe 600 million, maybe those days are diminishing. Those are all executive decisions. No shortterm changes. Youre going to get more of that, not less. Nothing short term matters. 2016 matters tremendously. If youre of the belief nothing will get done legislatively and he wants to create a legacy here, it has to be executive action. The legacy is done. The Affordable Care act. Its done. What about in this market, oil prices, where we are. The saudis, people are trying to understand, are they really serious about trying to cut price here . Is that for real . Then couple that with this other thing i dont think we talked about enough, which is the japanese are buying everything in sight. Kuroda will bid on anything. Bank of japan governor kuroda giving a speech after the announcement on friday. You know, basically saying were going to do again whatever it takes. Dont even doubt us in the slightest. But look, lets be some of these Japanese Companies reported good numbers. Maybe the low water mark there was the sony blowout. I dont think theres a limit on additional easing, including on bond purchases. No limit. They ought to cut taxes. By the way, the pension fund it moving up its allocation of stocks dramatically. They are changing things. I know that there are people within even our own network who will say thats phoney. Once again, when you go to chase with the gains or jpmorgan, you go to wells fargo. I have found when you deposit money with them, not once have they ever said, you made that money off the illgotten gains of japanese stock. They have never, ever told me this is totally because of the lower Capital Gains rate. If its green, its green. Draghi, its like, reason, were not taking that money. That was made because draghi decided by any means necessary. They tend to take the money. Would you buy the nikkei here . Im saying yes. Really . Not here. Not up because thats always been a foolish play. Im saying toyota should do much better here. And by the way, toyota today sees record profit because of the yen. Theyre devaluing their currency in a big way. Theyre buying everything in sight. Theyre propping up their own equity market, perhaps even ours, by buying anything they possibly can. So buy it and sell it. Im not saying its like buy and hold. Not like Warren Buffett doing some buy of the tokyo electronics. Meanwhile, you have the impact of lower fuel prices across the globe. Thats in dollars. Be careful. Okay. Ill be careful. The Saudi Oil Minister is meeting with mexico and venezuela in the next couple days. Mexico wants to open its Drilling Market to outside. China is thinking about opening. I just look at oil and think the biggest problem with oil is United States. If you go over the eog release, theyre producing so much more oil than the saudis can ship us here. Lets not forget its the revolution. Its the renaissance that is driving the price of oil. Were going to be back to where we were at 10 Million Barrels a day peak, okay. Were going to exceed peak if you look at eog. Well exceed peak in two years. That transcanada pipeline, forget all that. Bhp has to export. We have to export the stuff. Were driving the world price down. No one wants to think that because its inconceivable. Meantime, gas prices here below 3 on average for the first time in four years, even though polls show most people dont expect that to last. Were conditioned to believe theres no way these gas prices can stick around. It is going to last. Thats why chipotle is going to go to new highs. Thats why elle brands is going higher. I know michael kors you dont go buy a handbag, not that id get in the nittygritty of handbags. As a result of the savings. You might go buy for your wife. You might go to olive garden one more time. Look at costco. It never stops. Thats not mall based. Notice, the age of costco and the age of walmart. I am between the two guys who really get it. And let me throw in amazon. Your point was an interesting one, not mall based. Weve been talking about that a lot. These are all going to become data centers, these malls. They blame the mall. This is another reason to pay for alibaba. Which gets a series of price targets. 350 number for fiscal year 2016. Now im thinking its selling at 30 times earnings. If you give it a facebook multiple, youre going to get a 125 stock. Lets take it to 125. Its amazing, not to mention yahoo is 0 for 47 a share now. Why not . Especially if they can do it tax efficiently. I dont want to put words in their mouth, but they were giving that impression. Yahoo is worth 1 a share currently when all tax efficiencies are done. Im raising my target yahoo from 60 to 62. I had a chartist last night. Shes saying there could be a bottom in twitter in the next 48 hours. Wow. Were down to hours now. I thought that was one of the greatest calls ever. That really says change is going to come. Thats great. Amazing how they can do that. Theyre twisting the ceo story. Not like cupid. No. When we come back, a lot of earnings to get to this morning, including results from time warner and fox, who are seeing their shares rise today. Also ahead, the company known for caldwell banker and century 21. Well talk to ceo and chairman richard smith. Take a another look at the premarket. Did you know dow is coming off two days without a tripledigit move . First time since the end of september. Thats how volatile october was. Oh, man. A lot more squawk on the street. Back in just a minute. Old with terrible chest congestion. Better take something. Theraflu severe cold doesnt treat chest congestion. Really . New alkaseltzer plus day powder rushes relief to your worst cold symptoms plus chest congestion. Oh, what a relief it is. Here we go tthats why i take metabiotic,ed toa daily probiotic. Health. New multihealth metabiotic with bioactive 12 is proven to help support a healthy immune system. Experience the meta effect with our new multihealth wellness line. Time warner reporting Third Quarter operating profit of 97 cents a share. That was ahead of street estimates. Revenue also above consensus, helped by subscription growth for turner broadcasting and most importantly hbo. 21st century fox also exceeding. All of this coming, of course, a day after these stocks were down sharply when we got earnings from discovery. Ceo not painting a particularly pretty picture for the ad market. Yesterday on the earnings call, theres no question the last two months things have slow. Theres no question on the volume side. Theres no question theres more scatter in the marketplace. And theres no question that advertisers are holding their wallets closer even on the movie side and kind of coming in late bursts. Then you get fox, which looks fine. You get time warner this morning, which looks strong. Both Companies Buying back a lot of stocks as well. Did you see the buyback . Fox, you dont see it as much. Time warner, he bought back 69 and change. He bought a ton back. They bought back 4. 9 billion so far this year. 69 million shares. In the quarter, they bought back 1. 3 billion. Now they have 870 million shares. 1. 1 billion in 2010. Reporter hbo earnings up 7 . Better than anticipated. All of which goes back to this thesis of, are things slowing or not . Is the ad market slowing, or is there some sort of bifurcation for programming that some programmers are not doing as well with what theyre showing . It doesnt cost all that programming, those stations you dial around, they keep winning on that stuff. How about the number of women aged 18 to 49 watching Linear Television down 13 since last season. 13 . What are they watching . Those are big numbers. Theyre watching netflix. Kevin spacey retweeted me yesterday. Did he really . Thats cool. But these same companies are benefitting from that trend because theyre creating the content for netflix. When you have a movie franchise, it doesnt just die. A lot of times weve discounted the movie earnings, so to speak, from the film studios. We discount them. With netflix and everything else, these things live on and on. Not just living on in our consciousness, but living on as revenue producing entities. So do talking dog videos and cat videos. You and i dont come in on mondays and talk about the cat video we saw. Thats true. I think they pay more for them at netflix. I attached a go pro fetch harness on a stuffed dog yesterday and watched it through the eyes of the stuffed dog. Thats a video youre probably going to want to check out. Thank you, and i will. The question is, is the pie staying the same and digital taking more . Although, frankly, twitter, lower guidance. Facebook even lowered guidance. No, no, no. They spent more. But they also came in with a number that was below what consensus was for next year. They said, dont go above us. I could argue that sort of thing. Theyre saying its an investment year. I understand that. I was on the time call. I dont know if you were on the time call. The digital spending is up very big. Particularly auto, by the way, for advertising. So i looked at the time in call and said that digital Spending Continues to go up. I think it crosses 30 , giving money to program ads to google, yahoo maybe to twitter. You maybe of the total market. The money is going that way. Theres no doubt it is. And time said, listen, were trying to do programmatic. But they like programmatic video. Its a long way from when facebook went public and gm said, we dont know if this is even going to work. Its because of the hand held. You heard the alibaba call. Final thought here, keep an eye on time warner, disney, diacom and fox, all of which were down sharply yesterday and will likely reverse today. Elsa outselling ana, by the way. Talk about a franchise. Thats incredible. Its a great franchise. You do have an fx head wind for a lot of these companies. You say tomato and i smash your tomato. All right. Well get cramers mad dash as we count down to the opening bell. Take one more look at the premarket. Stocks tend to like the day after midterms. Looks like well get maybe a tripledigit open to the upside. Back in a minute. [ male announcer ] eligible for medicare . Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. All right. We got about 5 1 2 minutes before the opening bell. Its hump day. Mike, mike, mike. I love when you do that. Lets start with fire eye. Not a good story. Get your visine out. You got fire in your eye. What happened here . They kind of changed their model, but the guidance was disappointing. I love this. This is my favorite. In january we expect nongap loss per share of 2 to 2. 20. Were narrowing that range to 2. 05 to 2. 50. Thats not narrowing. That was the kind of thing that went on throughout this call. They widened the range. But they did switch their model to a service model. Theyre going to be combative about the fact the stocks declined. In the end, they did cut guidance. In the end, there was an increase in day sales. In the end, it looked like a hockey stick quarter. Nobody expected that. I did not like the quarter. But i like cyber security. I know you do. Do you like pennsylvanalo alto . I saw the go pro riding on the surfboard, that was enough. There is a point at which you throw your hands up. One more real quick. Trip adviser. The guy with the eyes. Lower growth. This is the triple whammy. That is not going to be helped. The japanese are not going to