Now the lowest since november. Our road map begins with the atand the gop on the verge the president and the gop on the verge of a much needed win. Plus apple making the 1 billion bet on manufacturing, launching a new fund to invest in u. S. Jobs. We elle a well tell you what tim cook told jim. Its a big morning on the hill as the house is slated to vote on the Health Reform bill. It would give the president the biggest legislative victory to date. Some gop congressmen have shifted from no to yes after an amendment was added to help cover preexisting conditions. Theyre calling it the upton amendment, jim. The question is, whats the future for the bill, if it does pass the house and the senate and if that happens, does the reflation trade is the path cleared once again . I think it is. I think this would be rather remarkable if they get it through. Just to get it to the senate so they can Start Talking about economics. Because yesterday, the fed issued a statement that was incredibly hawkish basically saying whatever weakness you see is transitory. If youve got this through and we return to the animal spirits we had in the first three months post the election then you could have a transformation. Right now the domestic and almost every single case is the drag. And that drag started when repeal and replace failed. I think its a big deal. I would love to see this done. All right, senator corker says he does not expect it to pass the senate in its current form. When the initial version failed to pass, you were kind of happy not to have to go through months of the senate wrangling over health care, but youre willing now . I think that yeah. Look, everything was just such a downer after they failed. Just to get it out of look, if you can just get this out of the house, then i think you Start Talking seriously but the house is still going back to border tax. The house may not have agreement. But when you sit down and talk with tim cook the absurdity of our current tax rates its so palpable. You have to believe that there will be some sort of unanimity between the president and congress. Well watch the procedures all morning long on the hill, on the house side. Keep you up to date on that. You mentioned tim cook, jim. What an interview last night as the president pushes for his push for job growth, tim cook telling jim that apple will start this 1 billion fund to promote advanced manufacturing jobs in the u. S. Cook breaking the news to jim in an exclusive last night on mad money. Were creating an advanced manufacturing fund, were initially putting 1 billion in the fund. This i did not know. Were announcing it today, so youre first person im telling. And well, not the first person because we have talked to a company that were going to invest in. Okay. Already. But this is 1 billion of apples 256 billion putting it in 1 billion of our u. S. Money which we have to borrow to get. Thats a whole other optic, but were proud to do it. By doing that, we can be the ripple in the pond. Going to make that first announcement later in the month. But to your point, youve got a quarter trillion of cash, but to do it here in this cash you have to money. Look, the absurdity of it was palpable. Throughout the interview there was a wry notion from cook about what the government does not to help. But you know what . I asked whether this is kind of a quid pro quo. You go out there and you answer the president s Campaign Promise that apple has to start doing more, what can the president do for you . He said, listen, worldwide we have to create more jobs. He didnt there was no real moment where he talked about trump. I have to be candid about that. But i think that this is a kind of thing, you notice its high end manufacturing. Hes not trying to bring back these jobs that are never going to come back which is assembly. These are the kind of jobs we can do because we have a good workfor workforce. I thought it was meaningful. Because were doing our part. You said we werent, here it is. 1 billion. Immediately people said why only a billion . What is everybody else doing . Nobody was doing anything until cook, i thought it was mean,f meaningf meaningful. And you have to borrow, and you did talk about the tax reform a bit later in the conversation if i remember correctly, jim, in reading it last night. Right. But also goes to where we are right now. And the need for true Corporate Tax reform, whether or not were going to get it the territorial system, 239 billion overseas for apple, but hardly any cash here. Therefore, they end up having to borrow to a certain extend to fund Something Like that. Kind of points to the absurdity of the current subjeystem. Well see what we ends up with this. The house being cleared because of the passage of the earlier vote. I know well get to facebook, they had a 10 tax rate. What are you know . What do we keep talking about 35 here . 10 , i think they took some credits so it might have been at 19 if you take it all in apparently. But thats still well below 35 the last time i checked. Right. Right. 19 is the effective rate of the corporate world. But we look at a lot of the retailers who are really struggling. A lot of the restaurants, theyre struggling. Theyre the ones that would be the big beneficiaries. So disney is down. Talk about cord cutting. And disney is a huge taxpayer and that would be meaning. For them. People are now take your interview and try to string it out a bit. Is this about components or new categories . I know 9 to 5 mac has a big think piece, your thoughts on that . Look, its great to do think piece. He was very opaque about it. But i have to believe a lot is involving Artificial Intelligence. Is lot of it is about vr. One of the thing look, everybody wants to leapfrog past the form factory that we have. One of the things that you have to do is you have to get people to manufacture things that take advantage of the new technologies that really arent in place yet. So i think thats going to matter. I think look maybe the next watch. Maybe its the phone after the 8. But i think its meaningful. Theyre not going look, this is a company thats chatter they dont throw around 1 billion here or there. I think its meaningful because they want to leapfrog whoever else is doing anything. Theyre very competitive. People forget that. People think theyre resting on their laurels. Thats not the case. I think the billion dollars is not idle. Yeah. You did try to get him to talk some pipeline. You even invoked your daughter on the timing of the phone. No dice. At least not yet. Desperate. I mean, desperate. When you invoke the daughter, listen, i want to get it for the holidays youre the bottom of the barrel. How do i do it . Total failure. Total failure. I dont know who else to invoke though. Maybe other peoples kids. But i played it, i tried it, i failed. All right, not for lack of trying, jim. Its a great interview. Well be talking about it all this morning. As david mentioned theres facebook to look at too. Better than expected results. Mobile accounting for 85 of total ad revenue up from 82. The social Network Continues to expect the ad growth rates to come down meaningfully over the year. Its whether or not the ad load has hit a wall. They have said for the last couple quarters. Its finney i looked back funny i looked back on the november quarter and they said it will top out in 17 on the ad load so thats not unexpected for the company at this point. A company by the buy during the quarter generated 3. Billion n in 3. 3 billion in cash flow. The level of profitability is astounding. 41 margins. They did spend capex at 1. 3 billion. Net income is 3. 3 billion. And its a far cry from apple but not an insignificant sum of money. Jim, what is your overall take away in terms of the quarter itself and particularly the guidance which again does seem to have the stock down a bit this morning. At least as we look 20 minutes before the open. I mean, this was a time when i felt that when they say meaningful, meaningful decline it was picked up by the analysts. Yet, everyone did raise their price target. When you do 6. 7 billion in mobile up, 58 its almost impossible to tamp expectations its so bold. In order to say meaningful, in order to say that spending is ramping what youre really saying is it really possible that we can continue this rate given the size of the company . I think theyre being smart saying this. There are people who bought this stock, somehow they thought they might have dropped that language. I mean, i think thats silly. This company is totally consistent. This Company Moves in the last two quarters between the Conference Calls, not after. Those who were buying it for some sort of blowout, take a look at the last two times they did the exact same thing as you mentioned. The stock will go down, there will be insider selling. The brokers will chatter, hey, theyre dumping, you have a three day rule, seven days later you can start buying. This is three days that there are a lot of selling, then we kind of you know, we level off. But people took it very seriously, david. Kind of saying, yes, we know this is going to happen. They took it seriously this time, but they still raised the price targets. Total expenses are up 40 . Theyre up to 18,800. Im shocked. You look at the market cap and divide that by the number of employees you get a big number. Or any other metric that you want to use. Adding 3,000 more next year. 1,700 employees in the First Quarter and another 3,000. You know, we talked yesterday guys in terms of our continuing advanced intelligence, zuckerberg was asked about, well, why not use ai . He said, listen, the tools will get better, but there are certain things that ai can do in terms of understanding text and whats in a photo or a video. That will get better over time, but that will take a period of years to reach the quality we want. Hence, they still need real people. With all of the human curators they wont catch anything youd want to have off the platform. I thought it was interesting, eric schmidt in an interview talking about ai and the dislocation of jobs says i may job eliminate im a job elimination denier. He thinks theres an aggregate net game of employment with robots even though every robot will take six jobs away. Thats an increasingly fiery debate. Its a matter of dislocation over time. Will the jobs be replaced immediately or will it take 30 years . I mean, i dont know the context in which mr. Schmidt made the comments but there are many who believe the dislocation will be enormous. Then eventually the jobs will be recovered and there will be growth again. But you go through some periods like the one we seem to be headed into and its not clear youll be immediately replacing the jobs. Well, i think that the replacement i had the ceo of expedia on this week, can you give me an example of Artificial Intelligence. He said, right now you can tell siri any one of the devices to do something. Cancel the trip, call the agent and stop it. But what Artificial Intelligence cant do, heres what i want you to do. Cancel the trip to bermuda and book it to Cabo San Lucas and say i want the best price. Tim cook said thats within reach and i think thats great. Because thats Artificial Intelligence bargaining for you, making it happen, we dont have it yet but thats the frontier are working on. You notice we talk about this ten minutes into the show every day . Pretty much. There are some things that we talk about and i wonder about the importance but i dont on this. This is what we should be talking about. So lets keep it going. David, david, we could be talking about whether kelloggs sold a lot of corn flakes. You want to revert to that im game. We can talk about that later and talk about that kraft heinz quarter. And what they said on the call. We have to go over viacom earnings. We have a bunch of things to hit. I could use a faber report. Arconic, give you one on that. One of your favorites. Im the only person whos not been invited to the board. I want that board invite. What is that . Short shrift. We elle a get to well get to tesla down on the wider than expected loss and elon musk looking to clear up the confusion on the different model letters. We have to get to square. Pretty good week for jack dorsey. The oil is lowest in five months and productivity was pretty pumped. Squawk on the street continues in a moment. I like russo. His on off splits are the best here. Yeah, but his offensive win shares didnt even break 4. Come on, check out that stopandpop what do you think . My tradeoff analytics indicate no one creates more space on offense. This allows him to nail a jumper from a densely populated urban area. What youre trying to say is from way downtown . I am still learning. I can see that. Hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade for years, centurylink has been promising fast internet to Small Businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. Teslas down a bit in the premarket. The electric carmaker posted a wider than expected loss, but revenues above consensus on the record deliveries of the x and the s. Last night, elon musk claimed that customers are a little confused when it comes to the 3. We had seen some impact of more or less orders people being confused about model 3 being the upgrade to model s. And we took action to correct that about a month ago. But that message has not filtered down to all of our customers. Jim, we pointed out yesterday its officially the most painful short of the year and down 1 . People are making jokes. Congratulations to the shorts. Well, look, i think that this is a quarter i went over the Conference Call three times. The only way to really understand it, you must be on mind altering drugs. Because you just cant take this thing in a straight value. This is a psychedelic Conference Call. Sag aned did says maybe theres not enough demand, or excess supply, no. Because theyre giving high great loaners to anybody when you bring it in for service. This man has an answer for everything. He talks about how he would have called it the model e so it would not be confused but no, ford sued him and he had to drop it. And he talked about when its going to be 700 billion and he said it was not an issue. It was alice in wonderland on the call. The analysts play along, its incredible. Then the bomb for the shorts at the end was hey, china, stay tuned to tend of the year. This guy is having too good of a time on his Conference Call. One of the analysts said, hey, listen, how about an apple combination, he said i dont know. My favorite was when can you make a million cars in 2020 . Yeah. Maybe more. Maybe more. I mean, this guy is incredible. These analysts dont know what to do. They are literally being toyed with and theyre supposed to be professionals. This is a nightmare for them. Nightmare for anyone tony sag aneedy, you are right to try, but you failed. Well, are the investors who continue to lap up the debt and equity offerings being rigorous because it puts them in the position where they can keep going and thats got to be if key here. His ability to sell yeah, 10,000 cars a week. Plenty of debt and equity. Thats the way it goes. Thats the beauty of the capital markets. I can tell kind of you know, where you believe it. Where you it may. By the way, did you know about the e3 thing . I didnt know. Until i read about it. The confusion, no. It was supposed to be sex and then sexy and thats why they got the y. All the different models. No, that was so you have to infer that its sexy. Its so revelatory. This is one of those i mean, he says, listen, well make 1 million cars in china. This man this man basically has he toys with them. And thats why i say look, maybe you have to get tuned up before youre in one of the Conference Calls. I mean, maybe you have to have like three gnts when youre asking questions because the answers are so hey, man, what are you thinking . I mean, i had more serious conditions with bar san miguel. Youre mad at him what does he think you are again, musk . Not an oldie an apparition . Whats the word . Im kind of a hologram. No. Im not a real person. Yeah. Youre a simulation. Simulation. Yeah. Youre a simulation. 50 chance. But brian from intel, he thought it was only a 70 chance i was a simulation. Lets take that off the table right now. Ill take the under on the 20. Jim, with well get to your mad dash and count down to the opening bell. More squawk on the street in a moment. Ready or not, here i come. Ek. anyone can dream. Making it a reality is the hard part. Northrop grumman command and control systems always let you see the complete picture. 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