tv Squawk on the Street CNBC January 30, 2018 9:00am-11:00am EST
dow is down 230 points below fair value nasdaq off by 55 we'll don't watch this as we get closer to the opening bell will, thank you very much for being with us today. >> pleasure. >> that does it for us today make sure you join us tomorrow, right now it is time for "squawk on the street. ♪ good tuesday morning, i am carl quintanilla and jim cramer and david faber. futures indicate the first back-to-back triple digit loss for the bill, the state of the union tonight and big news in healthcare and home prices are up 62. our road map begins with our
stock, futures is down sharply healthcare stocks are under pressure this morning and amazon entering the health business, pa partnering with berkshire, finding ways to cut the cost of healthcare mcdonald's reporting a major spending boost for thousands of new stores and digital upgrades. >> dow and the s&p 500 remains on pace for a 10 consecutive months of gain >> i think it is true. you come in and when you see stocks, when you read the release and the mcdonald's release in the lets just say in the cave and not look at these you would say wow.
these are great numbers. the market's set up to go down you have this team up that we talk about all morning with jai jaime dimon. >> it is generic, yeah, it is been up a lot and i want to take profits ahead of the president who's going to take credits for a good mark. ye market you come in and let them take credit we got thursday is national earnings day >> so there is a lot of reasons to take profits and not a lot of reasons to say you know what, once to the breach, it is my chance this is not your chance yet. >> thursday's night to jim's point is google, amazon, apple those are just the headliners. >> looks like it could be
rolling over i pick on that one because it is healthcare >> it is a big story today bezos and buffet and dimon is teaming up addressing healthcare concerns for u.s. employees. three companies say they'll pursue this objective through a new independent company that's free they say from profit making incentives >> that's a negative if you are in the profit making business like everyone is you will see united health down the most not just because it is up the most but that's what they do >> yeah. although the healthcare cost alone for each of these companies is substantial to the extent -- of nonprofit you can go about cutting those costs that was a substantial saving.
jp morgan has a cost of a billion dollars a year >> oh jesez >> this is very early and what seems to be this effort, buffet and dimon and bezos. they have been talking about this issue for some time, only recently decided to make it a official in a way. they have come public with it early of it. in part of making it public, you may enlist others in the effort. >> right >> from what i am picking up, guys, it does not mean they're going to go out and start a new health insure. it seems they're starting a company in some way that'll come up with some better ways we know there is got to be so many of them to conduct healthcare in this country and push the healthcare insurer
system to do that in some fashion. i heard expectations are to work with the hmos and not to create a new insurer. >> there is a middleman between the hmos and that's customers. >> yes >> now, these would not necessarily -- they are frictions. some people say they are frictions. you know what this reminds me of when president roosevelt came up with the tv ad, i think everything is too expensive and electrici electricity. lets figure out how much it really costs to do thart, you discover there is frictions throughout the system some companies are going against frictions. this was one of those deals that's supposed to be saving the system money >> yes >> are they free free from profit making? that's anticapitalist, i guess >> but the end results of this
would still be enormous savings that would help profits and all companies involved >> even to your point, gary cohn, in the last area pointed out this works against you in an area of inflation. >> we had buffet so many times talking about this is issue. healthcare cost goes up more than anything else >> college and healthcare just have no governor this is a little bit more. government is helpless these are three guys look, you can argue in a super capitalist world that jaime dimon and warren buffett and bezos, they're more powerfu
powerful -- than the government. >> this is insane. i mean that costs -- it is insane that it costs that much he should be a buying group. why does he needs these companies? >> yes, when you add up the employees and amazon, who knows what it is and the portfolio of berkshire, you got to get past a million people, i am sure you are. if it succeeds it will be beneficial and lord knows, when it comes to healthcare >> it is your pet peeves >> and how much money i am spending all the time and lack of transparency is incredible. >> right >> and national healthcare, no, it is the va the va gets a good break, right? well, this is kind of a buying group, the size of a substantial part of -- you can argue that
there is an actual percentage of gdp. >> whether or not this is deserving of 5% of unh, i don't know we are not going business against them that would not appear but they may be in the position to pressure them down the road >> i mean you don't know >> we spent a couple of years here at this desk wondering when amazon would disrupt healthcare. this is as close as we gotten. >> here we go. we all thought there is a fabulous piece today, not timely, okay, lets, it is kind of baked in. the amazon initiative can be baked in it was baked in more today than the piece is written maybe it is good timing. cvs is trying so hard to get the cost down. they're still in the profit
making business. aetna is in the profits of making business. they're not free from it >> scripts are not free from profits. >> no, none of these companies are free from profits. >> that's one of the greatest line ever. free from profits. come on. >> that's the only way to solve this problem >> well, they like to fiend out what the truth costof healthcare is. maybe you have to use teladoc. >> hey, i have the flu >> you nail it they want to find the group cost of healthcare and pressure everybody. >> yes >> got it. >> he sits here and talk about how expensive his healthcare is. >> because it is >> you don't get a price tag or a bill until it is all done. >> oh yeah
>> there is no telling you going in >> and any decisions that you may make that'll save you money. everybody knows there is nothing you can do except for these three guys gotten together who else could be in that's more powerful than these three guys >> super man >> able to leap tall healthcare bill >> he's as powerful. >> this is revolutionary will it be tomorrow? no what do you think jeff bezos and hey, that thing is not important? warren buffett have been talking about this thing for so long and jaime dimon, he's got five more years to be able to talk about this thing, and what, jeff bezos. >> bezos is not going to talk
about this in the super bowl ad. this >> we don't have a management thing on this thing. >> they're going to look for ceo. >> oh my god, they're going to do another citibank oy bank off lets say they find the ceo, someone we all know and they tell us you got 5 billions well, that's formidable. >> certainly would >> it will be like the va. the government has not let anyone have the -- the government never uses its buying power. maybe these three companies can go right to vizor. here is the price we'll pay for
x, y, and z. >> okay, okay. >> by the way, we are going to talk to brett saunders a little bit. >> botox is not covered. >> i guess that's why it is great to be a dermatologyist >> my parents wanted me to be one. today i have make up and you cannot see a thing and we used to go and the guy was like wow, your skin is bad thank you, thank you i need $150. >> tell a doc that your skin is bad. this is what your healthcare is going to be speaking to it >> i like that >> tell me what it costs, that's what i want to know. >> alexa, i don't feel well. >> well, get to bed. >> we'll talk about jaime dimon and take a look at the futures
here, all 30 dow components were down >> it ishanging in there now >> mcdonald's, that was great. mcdonald's can be covered by this we'll get to mc 2 in a moment. today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york.
brent saunders is joining us on the phone >> thank you for having me >> it is wonderful to see three world class companies look to see how they can innovate and disrupt quite the healthcare system >> you believe it is really being done to solve problems in-house or are they going to export this for everyone to use somehow? >> well, my sense is and i am speculating they're looking at their own healthcare cost and saying how do we manage this better if the net results of that is lower cost for employers can be exported as a model to other employees both large and small i think that's good news >> brent, good that you called
in, thank you very much. >> sure, jim >> curious about how the ability to put the other buying groups and these are big companies and a lot of employees listen, you got a new truck coming and we are willing to pay x, you got to go through the distributor and they say no. brent, you pledge to cut costs we are coming to you directly, give us a break. can that happen? >> you know it could, but those are the discounts that we in rebates that we provide asing a gas stati aggregation of employers of the group discounts and whether they can do it better and maybe that's positive for employees and patients, right? bre >> brent, how could they do it
better if they are not taking a profit these are profit companies >> yes, they have not had enough scale and it appears that they do >> well, so brent, so you were at this release like we all did. i assume that you had a chance, have you talked to bezos or jaime dimon, are you just guessing here in terms of what you expect will become >> yeah, i am speculating. i have not spoken to any of them i will reach out to them but i think it is a positive for all innovators i think time that we saw more innovation in the provision of healthcare and services and management of chronic disease and in this case you put the patient which is their case the employees at the center of it and you try to bring down costs.
>> you are starting this new company and it is not for profits, how do you go about doing it if you were in there are shoes in terms of first step >> they represent close to a million or a million or more employees of the issue in the united states. my sense is the main driver of their costs are chronic whether it is diabetes or complications due to obesity or heart disease or things of that nature i would look at how to be better and what incentives can we put in place to experience the burden with the patients and drive better outcomes. if they do that, it will drive the cost down. >> what kind of person would you make ceo of this would you get someone that's retired from the industry because this ceo could be as important as the head of the va. honestly, another buying that's
very big and demand certain things and demand a level of technology with who would be an ideal ceo >> you know it is a good question, you can go after someone who's very experienced and very knowledgeable you know maybe you can go after someone that's a disrupter, someone from inside amazon or berkshire has disrupted industries before and amazon is the most experience in that. there is so many experienced healthcare people. it is easy to fall under the track of this is how we have done it and maybe we need some fresh thinking >> one last question, brent. would you expect or want the government to have anything to do with this >> i don't think the government necessarily is the best a disrupter and they have not been the best providing for the market i think they would be best
watching this group and learning from them. i would love to help them and we would love to be apart of the solution i will reach out if we can help. >> thanks, helping makes sense on this early days brent saunders >> march 28th. cnbc will host our healthcare conference, it is called "healthy returns." go to cnbc/healthcarereturns.com for tickets. >> the other thing i would say about this is lets say you pay $50 more to get everything you want at cost for every drug company. is that prime? think of what he did in other business $50 more, would you pay that to add your premiums because it is going to be the biggest buying
group. >> yeah. >> i am talking about theoretical. >> i would >> forget the monthly. >> 600 bucks a year to get that cost i am all in. >> we'll throw in netflix. >> costco. >> i am saying amazon prime could make it so you pay a lot less for a lot of drugs. >> you got me at hello >> daviwe'll get cramer's mad d and we'll count down from the opening bell quk t see" ea the market, "sawonhetrt,ahd. think your large cap equity fund has exposure to energy infrastructure mlps? think again. it's time to shake up your lineup. the alerian mlp etf can diversify your equity portfolio and add potential income. bring amlp into the game.
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all right, lets get to "mad dash," we have not talked apple yet. this is a good occasion to do so >> the super cycle was a big bust >> tim cook never told you what the order is going to be you got this kind of story out there which you cannot stick a fork in which says this quarter is going to be fine. the guidance is going to be terrible this morning, bank of america says don't be too pessimistic. when i listen to these analysts, they have set this thing up to disappoint and when you do that, you are going to get a disappointment so if you really want to own apple, plenty of way
to see >> what's the hurry? >> see what they say, particularly the conference call is going to be more important than typical >> yes, i am just saying there is a lot of analysts who's been kind of -- saying super cycles if you are a short seller, you could not dream of this super cycles remember pea body comes out of the soul super cycles? >> i do. >> you never want to hear the term super cycle s so let it coe in >> got it. >> stock, 165. 162 is about 10% off the high. is that enough all right, iphone 10 is no good and didn't know about the 8. just remember that they can
control the dialogue and the narrative on the conference call they can make this be down >> all right, lets get to the opening bell and the s&p 500 at the bottom of the screen empire state and reality trust 1,076 stairs they're celebrating their 20th listing anniversary. >> it is going to be hard to separate the market of decline of what healthcare is contributing to in that decline. >> i have been kicking myself, i have been telling people unh they raise things and they were just magnificent and, well, today's blast day and
i was looking at what happened with kroger after whole foods and you had to wait a little while. that was being targeted. don't forget that autozone was targeted there is a lot of companies that's been targeted periodically you cannot just go in and say you know what, that selling is over in the first five minutes of the day people are going to try to figure out what this thing really means by the time they figure it out, i am not going to be there that's kind of what happens. down 244 on the day of the state i don't have t of the union >> last year's address, it was a joint session congress was followed by the best rally of his term so far. >> well, this is good for him. >> setting it up for tomorrow, you mean >> reading the prompt ter nicel
>> gary cohn today was interesting. i asked about the president being angry on air force one, did you hear what he said? sleeping like a baby and didn't hear a thing >> i was asleep. >> that's always a good thing to say like if you and i had a fight, carl. >> sleeping. >> have the markets come down and softening things taking claim for a good market does not hurt, end of the month. >> we went 400 days without a 5% draw down. it is an all time record i think it was steve foles that says that's what we are looking for, 5% as the thought of interest rates begin to pinch. >> well, you got this thursday of the remarkable series of quarter that's reported.
by the way, i don't buy the tenure at 2.7 here not that long ago, we were ho hoping the 10-yr will go up. now, we don't like it in 2.7 what is important is the market is going hard. they were saying, look, oil is coming pack and a lot jobs are being created. you don't want to lose the job creation that's going on with texas and especially exxon of 50 billions >> right we don't know where the baseline was and how much of that is incremental as a result of tax reformer and how much it really is not and simply an opportunity to use a good headline to make sure you're on the right side of the administrations of things
like that. >> i agree >> it is at least 7 or 8 >> are you okay? >> we can get you some cheap healthcare if you need it. >> i choke on water sometimes, too. >> it is a weird thing >> we got the whole -- >> speaking of water, i want to talk about brunswick and marine. >> wow >> al creek, a large hedge fund run. a company that you know it >> brunswick is a great company. >> they are not, they're active in a way and they are putting a letter out here. they are not challenging and nominating for the board and no getting members on for the 18 annual meeting what they are doing is saying they have been engaged to constructive dialogue regarding incremental values for shareholders and they are providing an update in this
letter of the specific focus does appear to be reducing the discount >> do you think that makes sense where they say a marine engine franchise and equipment business don't go together and their two separate classes from shareholders >> i happen to think that brunswick is remarkable. they have been building up the business and it is a nice counter. i mean right now, of course, the business is good and this business is not that good. do you get rid of it right now because it is a drag they would say look, we want another business, business is the top and they got everyone knows these brands what happens is you go to a hotel now and they put it in
lifetime fitness >> their point is there are comparables out there for public companies for earnings is very high and consume b high i don't know, that's what they are arguing. it is one of those letters that puts everybody on notice and they're not going on the boards. >> i honestly, i ask you every time because jesuez, do they really fit in you can argue that some of them want that health and fitness, i don't know. >> i just think that this is a decent combination >> hog by the way, sort of the near by area is down 7%. it was below estimate. the other big story, u.s. comp is up 4 and 5.
we were looking at 5 global comps were ahead. 5-5 verses 4-9 estimate on delivery >> remember starbucks had plus 2 comp stores in america the stock is unstoppable i still think 8% sales growth. this is the problem that we have here this stock is up so much how could you not justify taking it off the table >> i think the answer is you can. hogs get slaughtered this is a great stock and it is up a huge amount and if you want to take some profits, what, i am going to fight it? >> right >> you are talking david, about jp morgan. >> yeah, it is incredible when you look at that stock >> it is a straight up and mcdonald's in a year, 42% verses s&p 500.
it doubles the s&p 500 >> it doubles starbucks. i do believe when you look at these kinds of stocks and you realize, lets say here is a good idea, this is what karen cramer taught me when we are training together divide it by 10. now, it is $17.50. >> this is very early by the day. it is 9:38 do you want to say the selling is done? >> yeah. >> let it comes in and see what happens. >> so it is not that stocks won't go up. i want to get to thompson reuters this morning i want to check the stocks and i am not sure if it is opened yet.
reuters reporting and confirmed and a memo of employees of a potential partnership of their businesses it is valued at $20 billion. this is no the news business they say in a memo that thomson reuters have been able to transform themselves and representing an opportunity to deliver on that promise while accelerating a strong business black stone would be shareholder of this potential sale what i would add to this is we may see more of this companies willing to sell businesses or even in whole or part because of tax reform there was a time where you might
have had an appendix to your company and a unit that you want to sell but the tax leakage given your base was simply too high to think of doing it. no longer. what i hear from a lot of bankers that you will see this year of the mma and this maybe an example of that is going to be companies selling parts of themselves that they don't feel unnecessarily as they once were because they are not suffering the leakage of values they would have given the lower rates on taxes. >> can you give us other examples of what it could be >> i think there is a lot of different companies that you can imagine that may pursue a spin or a sale. >> a sale of something because that's when you will be dealing with >> lets say brunswick. would they be able to -- we don't know what the bases is >> there are a way you can do in a tax-freem manner.
i am talking about similar what reuters maybe doing. >> lets bring in the elephant in the room >> first is trust. what do we do here >> that's how you do it in a tax-free way >> who knows i don't know what their bases in this thing >> healthcare business they may pay more. >> come on their lifetime business is really good. >> they over paid for that >> is that the only one they over paid of >> i am not thinking of ge in this case. >> you have to think of ge ge is a good place they split things up and they have to sell something and they certainly willing to >> all options are on the table. >> did baker use a ge call
there is a little flexibility to sell that. there is a lot of ge guys on or ge related wh when ever you talk about ge, you are allowed to find out that there is push backs. baker, that could be something that could happen and that group is red hot >> why do you just nod it? >> you said it all i don't have anything to add point. >> you cannot say it is interesting. >> that's interesting. >> thank you >> you are welcome >> dow is down 230 you got to go back to last may, lets go back to bob pisani on the floor. >> good morning guys, two days in a row is down whach what we are seeing is as defensive tone in the market down the lease are the more defensive names, consumer staples are down a little bit and telecom and utilities are holding up a little better
and semiconductor isdown the most of course, healthcare is down a from the jp morgan and berkshire announcement cvs health also is weak and aetna is to the downside some of the hospitals like hca, i would note and tenet healthcare is on the upside. it just turned negative here but hca is on the upside of this we saw some real sales program that goes through the market i want to show you the asia market global markets were under a lot of pressure. we saw the philippines and
nikkei and south korea and hang seng the question is is this an end of the month rebalancing because stocks have gone up so much or just concerns of interest rates. that's the debate today. are we at some kind of inflexion point? >> the vel loon the 10-yr, thatc issue. markets have held up because we had revisions that has kept things going it is remarkable that's the big mover here. now the be date is more rate hikes and inflations that creates a pressure on the multiples that stocks are trading at stocks are pricey. i want to show you this, we had what are called peak earnings
acceleration we have estimates for 2019 analysts are put ting in the numbers. it looks really good 2017 at 11% and 2018, 16%. that's why the market is so well because they keep on revising the upwards. yes, they're up 10% but that's an earnings growth deceleration. no matter how you look at it, it is deceleration. the people out there are saying the market is going to seize on this how can you argument that we are trading at a pricey multiple when earnings growth is decelerating look here, if you look at 18.5 multiples on the 2019 estimates here, you get 2,600 in the markets. folks, that's 200 points below of where we are right now. that's why this multiple
question is a big topic. a quick note of the s&p 500 if you are worried of the last two driveway days we are up 6.1% >> on average is 10% it is been quite a remarkable start of the year. the dow is sitting at the lowest of down 240 points >> carl, back to you >> lets get to rick santelli in chicago, good morning rick >> good morning, carl. one of these big ex prekpressio that we hear is globally synchronized it is used to compare stock markets or growths you will see what i mean in a minute all these charts you are go i think to look at starts december 1st. lets put the two year on top of the european two-year of the shots. look at how much ground we have
covered. lets go down the curve, lets put bund together. we always seem to look at our equity markets what we see and normally think of is that this is unique to us, it is not. everything since post crisis whether it is policies or markets. they are correlated and sometimes it is good or maybe a day like today it is not good. if we look at this these are big amounts of little push back in opposite direction. sounds familiar? when you think of sovereign rates and all the distortions, it is really is interesting to think finally it is starting to get a post that we have seen in other aspects like the equity markets. lets look at credit spread you can see in the spread form
and also starting on december 1st, i think barclays for the east charts. the high yield you can see how it is more well behaved and you see investment rates navorrrowing as well. it is no reason not to look at these and be optimistic on a bigger picture the final chart, that's something maybe that's not optimistic depending on which side of the import or export side you are middle class people should like stronger dollars and multi nationals like weaker dollars. looks like the ladder has its week as you see of the index >> carl, back to you >> thank you, rick santelli. >> take a look at dow here we got some components hanging in there disney is in the green unh, the dow is down 262 on this tuesday morning. don't go away.
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let's get to jim at stock trading. >> scott' miracle, there are some issues with california growers, the profit margin, whether things are going to slow down a little there. all i can tell you is is that the pot market is in such flux, remember you're allowed to grow some hydroponically. >> does jeff sessions figure into that? >> i think he does i think, frankly, the pot market, everyone is trying to figure out what you can do with the pot market can you still grow it? can you sell it? so i think that there is an over inventory of pot, perhaps. but you have to be careful because scott' miracle grow, this is not their quarter. this is not the breakout quarter. those of us who garden know this is the next quarter. it's entirely hydroponic i have to tell you, you have to let this one settle.
there's so much hot money in this and it's not because of miracle grow what would you know about a lawn >> just have to let it mellow out a little bit >> mellow out. >> right >> yeah, get into a myles davis kind of thing. >> draw down perhaps yes, jim. >> what's on "mad" tonight >> we have treks whix for those who are sick and tired of putting resin on our water recyclables. talk about infrastructure tonight with the president there's a nice jive, right and then valley nat. down to florida, not just new jersey it's an encouraging model because deposits are cheaper i'm trying i'm trying. >> wow health care. >> yeah, big day and a lot more still to come. we'll see you tonight, jim. >> alexa oh, she already knows. doesn't matter siri has no clue. >> "mad money" 6:00 p.m. eastern time dow down 271 more on the selloff in a minute.
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good tuesday morning welcome back to "squawk on the street." i'm charles christian and michelle caruso-cabrera. sara is off. market selloff continues today watch how serious it gets. dow is down 280. bear in mind, unh is about 85 points all by itself on a day where we're going to get state of the union and a two-day fed meeting begins got some economic data crossing the tape rick santelli has that >> yes, we're looking for a january read on conference boards consumer confidence it's just out. expecting 122, 123 we ended up with better. 125.4. this follows a nice upwardly revision to the previous month from 122.1 to 123.1. so let's take that 125.4 how does it stack up well, it's the highest since november when it was 128.6 and that was 17.5, 18 year high going back to 2000
this is a good number. we look at the marketplace ten-year note yields are hovering just above 270. of course we have state of the union and a fed meeting. a couple of good reasons for the equity and interest rate markets to be on alert carl, back to you. >> rick, thank you very much. roadmap this morning going to begin with spooked. stocks tumbling for the second day in a row is the bull run finally over. potentially historic announcement three companies teaming up to try to bring health care costs down we're going to bring you the details and what is a big impact. mcdonald's reporting results posting its best same store sales growth in six years. we're going to dig through the numbers and speak with two former fast food ceos. get to the selloff that's underway the dow is having its biggest two-day point drop since brexit. of course, on a percentage basis it's not quite that far back brexit was june of 2016. couple of things at work here. obviously people paying attention to the ten year at 272.
then health care is a selloff in and of itself because of the disruption brought about by this new partnership between amazon, berkshire hathaway and jpmorgan. >> you see every single division of health insurance and also anybody who's a distributor, pbm, selling off we don't even know really what this company is going to be. i assume when i read it that it's going to be a health insurance company and also a pbm, prescription benefits manager. why wouldn't you do that if you were amazon? because distribution is their strength >> yeah. >> that could be an incorrect assumption, but i would assume that that's what they bring to the table. >> you know, based on the early conversations i've had with people around this, michelle, it's not clear to me that that is going to be the case. >> interesting. >> it's not clear where it's going to end up. when i asked sort of is this going to be a health insurer, the answer was no. in fact, it's designed to come up with results that will, therefore, pressure the overall
delivery of service, including health insurance to lower costs but not necessarily try to compete against it with its own offering >> now that said as we reported earlier, this is very early. this is not like they put a press release out sort of, you know, day 300 but day one. and in part to try to interest others to join their effort. and we talked to brent saunders, the ceo of allergen earlier in the show he indicated, hey, i want to call these guys up and see what they're thinking about that was the hope. seems to be early in the process and hard to sort of -- i'm not sure they know necessarily where they're going to go. >> let's talk more about it. health care is dragging the market lower as we just discussed. jpmorgan, berkshire hathaway and amazon announcing they are going to form a partnership designed to improve health care meg terrell joins us with more of the details as far as we know them. >> that's right, michelle. the three corporate giants say they're forming an independent
company that is free from profit making incentives and constraints. the focus is on technology to provide u.s. employees with, quote, simplified, high quality, transparent health care. as you are mentioning, there's a lot of question marks about what this will ultimately look like the simple fact that amazon is involved is having a huge impact in stocks. that's because of all of the rumblings taking a bigger role in health care express scripts and cvs. it's all down. transparency in the health care system seems right for potential amazon competition. health insurers you guys pointed out also getting hit as they're already in the business of trying to manage health care costs. evercore saying this is a buying
stock. they say there is no obvious competitive advantage here in the insurance space. we'll also look at retail pharmacies those of course under pressure walgreens, cvs, rite aid as they worry about the amazon threat. finally, drug districtorbutordis would it require the necessary moves to distribute prescription drugs. so far it doesn't have the licenses many point out this move from amazon is not in the drug distribution space one may be expecting the stocks to see some relief today many saying there's a fear this is the first toe in the water of a bigger move into health care for amazon a lot of questions but everybody across the health care space saying this is a potential negative michelle, back over to you. >> as david highlighted, maybe the companies don't know what it's going to look like. thank you, meg. >> thank you. >> quick reminder, we'll talk about how amazon is going to be entering the health care business at cnbc's healthy
returns conference in march. as we said earlier, market's under pressure this morning. our next guest sees more red for the dow in february. joining in with a thesis on how bitcoin's price could predict the dow's next move is tom mcclellan. good to have you back. >> hi, carl. >> you're a mast jer at doing some of these analogs. can you walk us through what you're doing with bitcoin's price and how it may predict the dow? >> well, piece of analysis we recently shared is that it stemmed from looking at a chart of both bitcoin and the dow on a contemporary basis, meaning at the same time and notice that they almost fit but not quite right. playing around with the chart a little bit found the price pattern in bitcoin prices tends to lead the price pattern in the dow by about eight weeks and the interesting thing, this only started from the point when bitcoin rose above 1,000 bucks
before that bitcoin's movement didn't seem to have that much movement effect on the dow ever since then the two have been marching to the same tune but with a lag the dow is following the same footsteps. if that continues, then that forecast atop eight weeks after bitcoin's top in december which would equate to february 10th, which is a saturday, because bitcoin trades seven days a week so the market won't top on a saturday, but around mid february is what that forecast that's if the analog continues working and the correlation continues in effect. >> right and of the analogs you put together, tom, how would you characterize the correlation here relative to others? is it strong, weak, somewhat in the middle >> this is a pretty strong one you can look at the strong little wiggles if you missed the chart of it on air there's a chart on our website. it's pretty good, but analogs come and go all the time they drift into correlation, then they drift out of it. every analog i've ever studied eventually breaks up
correlation. that's something you have to know if you're ever going to use a tool like this, eventually it's going to break. usually it's right when you count on it the most especially if you go on tv talking about it. >> still, it is intriguing any thoughts on the rising interest rates that we're seeing consensus is the reason we've got two days to sell off is because people are getting worried that rising interest rates starts to provide some competition to stocks. have you looked at that at all >> oh, my gosh you no longer get to pay the german government money to hold your -- hold on to your money for five years i think that the treasury bond has gone down in price a little bit too far and there's going to be a snap back that's going to be coming. i'm not seeing in my forecasting models, i'm not seeing the same degree of inflation that other people are seeing so i think that story has been over done. what we're seeing on the stock market with the two-day selloff is what we call a warning shot we've had this long, long period without any kind of correction and today if we closed here with the numbers we're showing we'd
have a mcclellan oscillator down at minus 211 that we haven't seen in a long time. that shows you the real selling is going to come about four to eight weeks later after you have the warning shot over sold you usually go back up and exceed the prior highs i'm still looking for us to go up into late february, early march. bitcoin says february 10th but there's other things that say early march. march to august looking for a big selloff which is normal in the second year of a presidential term. usually when you have a new president in office he tries to get all the bad stuff out of the way in the first two years so he can spend dwleer and four declaring victory and running for re-election. i'd expect more bad stuff to come the market's way and for people to get a little more discouraged than they are now and have that show up in the movement of the stock prices that's not the mission right now. the mission is to see this over sold condition and enjoy it and climb on board for about another month, run higher, and then we can start worrying about getting out and avoiding the summer
losses. >> yeah. lpl did some work on mid-term years, tom since 1950 average intrayear pull back around 17% for the s&p. as you said, because of some of the political dynamics, but then a year later the average return is up 32 >> that's right. and there's a lot of people who have been -- traders from the last few years that are not used to understanding what a 17% pull back would be like that's just average. i'm not projecting magnitudes. if i get the direction right, the magnitude will take care of itself with the tax cuts that we passed in december, we've probably pulled forward a lot of the gains that would normally appear later in the presidential term and so we may have to go sideways downward to wait for the schedule to catch back up to itself. >> tom, good stuff appreciate it. tom mcclellan talking about the selloff. dow is about 311 mcdonald's a big story earnings and sales that did beat the street we'll talk to ed rensi who ran
mcdonald's and andy pundzi with us ron kruszewski unh a big piece ofhi ts. "squawk on the street" is back in a minute. we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back
for more on mcd and to talk about some of the big jest stories of the day, let's bring in ed rensi and andrew puzder. >> good to be here. >> good morning. >> u.s. comps four five, there's a lot to look at here. and the investment they're making in upgrading digital technologies, what did you make of the quarter >> i think the quarter is outstanding. more importantly i think the track record for the last few years is spectacular they have put together excellent strategies technology on a consumer side and back of the house. their growth in new stores, selling off company stores to the franchisees. the g&a has been out of control and they're getting that under control. it follows the mood of the country. it follows the market. it's never led it. it will never be behind it
i think all in all really good the thing i like most, however, is the value menu and the fact that the franchisees have adjusted pricing with commodities and they're not going crazy. the franchisees have bought into the value menu as they have in the past and i think the future's really good for mcdonald's. >> yeah. andy, i mean, bringing peace to the franchisees is no easy tax you have forex working for them. obviously they're highly leaf veried -- leaf verdict -- levered to a robust market. >> keeping the franchisees happy is very difficult. a few years ago they were having big problems with franchisees. easterbook has done a wonderful job. the future looks good for mcdonald's the present looks good their stock being down, look, i think actually mcdonald's did so well this quarter, the results
were so spectacular that its stock being down is obviously dealing with factors outside of the business -- outside of business performance i think you're seeing that with a lot of companies stocks are down, but companies in america are doing spectacularly well they're growing. they're investing. they're raising. they're giving bonuses and giving raises. you have a very dynamic economy. the stock market is being influenced by other things, i think principally interest rates. >> the selloff in the last couple of days a lot of people agree with that, mr. pudzer we think the president is going to hit the topic of infrastructure hard. do you think that's a smart thing to do right now? how successful do you think this white house will be in trying to get an actual infrastructure program through congress >> well, i know it's very important to the president, and i know he -- this is an area where he has some personal expertise. this is kind of an area where he's been involved his whole career and he wants to exceed
1.8 trillion invested but he wants a lot of that to come from the private sector so we're talking about partnerships that he's very well able to negotiate that could be a benefit not only for the country but for taxpayers and american businesses. so i think tonight he should try to sell that plan broadly because you're going to have to get something through congress you don't want to give too many details. broadly let congress know. let the people know what he wants to do and then let's get going. let's hope we have the kind of results we have with the tax cuts >> ed, can he do in year two what he's managed to do in year one? >> i think so. one of the things i love about donald trump is he's neither republican nor democrat, he's a business guy and he understands if the economy's growing well, the tide will raise all boats. and i think andy's exactly right. i think this infrastructure bill is very important to not only the president but the country in total. we're starting to rot at the core, and if we don't get some of these things fixed, we're
going to be in deep trouble. one of the things i find really exciting about all of this has to do with the fact that the president has built big projects he understands if we don't smooth out and make more efficient the permitting process and we spend 15 years getting runways approved, bridges built just from a permitting standpoint, we're going to be in deep trouble because that money's going to sit on the sidelines, not go to work. we've got to address the regulatory side of this infrastructure bill and spending those dollars smartly. >> yeah, or else those shovel ready projects are never actually shovel ready. did you hear about this deal between amazon, jpmorgan and berkshire hathaway where they're going to form some kind of health care company, not going to be profit driven trying to solve the rising costs of health care mr. renzi, does that make a lot of sense to you? do you think, wow, finally the private seblg toctor is finally getting involved what are your thoughts >> these companies are staffed,
managed, run by very, very wickedly smart people that understand that this is a very broke system and it needs repair desperately. and the bureaucracy of government has screwed this thing up so badly starting with o obamacare and then the attempt to fix that. i look forward to seeing some smart business guys that really understand markets getting in there and trying to bring some clarity and smooth this out. i think it's beautiful i'm glad they're doing it. >> mr. puzder, what about you? >> i think the only thing that's really going to bring health care costs down is competition i think we need to reinstitute competition into the system. if what amazon, jpmorgan and berkshire are talking about is something that will compete with the current system, try and drive costs down so people are competing for insureds, i think you're going to see things improve. i think the senate bill would have done that i wish we would have passed that having not done that, seeing people step up from the business community is tremendous.
look how they stepped up after the tax cuts you give business people the opportunity to make progress in the united states, they are anxious to do it they will do it. tax cuts gave them that opportunity and i wish these guys the best in coming up with a solution to our health care problems >> mr. puzder, i'm the girl on the panel so it falls on me to ask this question. in light of what we've seen with the me too movement, steve wynn the latest situation, let's call it when you ran cke, they were famous for these very sexy ads do you think if you were running the company today you would be able to run those? >> it would be more difficult to do that. i would point out we didn't have any of these sexual harassment claims at cke when i was running it it would be more difficult to run the ads today, i think quite honestly, just before i left we left that format, went to a different format because i think in the current environment that's not something that was drawing customers in like it did back in the 2000s. the ads are designed to generate
business those ads basically saved our company at one point we were in very deep trouble in the early 2000s. today i don't think they'd have the same impact so i don't think we would be doing them. >> can i ask you to clarify something. if somebody were to google your name they would see that there was a 2004 lawsuit where there was an alleged sexual harassment case involving you that was settled. >> yes >> so when you say there were no accusations, can you explain what you mean? >> yeah. we didn't have the numerous claims like you see with hollywood people and these politicians. we had one claim that wasn't the best one that any of us sexually harassed her, it was a claim about the workplace, the workplace environment. it was the only claim like that we had in my 17 years of ceo we settled it for less than it would have cost to try the case which is what your lawyers urge you to do. it's history it shouldn't have happened
we disagreed with the allegations. we would have fought it very hard but we could settle it for a low and reasonable amount and our lawyers advise the us to do so. >> ed, to michelle's point about marketing and corporate messaging, we're going to get to the super bowl on sunday mcdonald's is an enormous marketer what's an effective message in this environment that we're in right now? >> i think, you know, the nfl's about fun, enjoyment, port, entertainment. we ought to keep the message like all the social commentary that's going on i think detracts from the game itself i personally am disgusted with the behavior of so many people in this country today. we have seen that if we get a splinter we scream cancer. there are a lot of trouble in this country the sexual harassment thing is untenable. i think that this business with steve wynn is pointing it out again and again and again. i hope we can get past that. i hope men wise up to the fact that they need to behave themselves and they need to
respect women. i had a lot of women working for me at mcdonald's they were great employees. i wouldn't trade them for anything in the world, and i don't understand why men believe they can pull this kind of crap and they ought to -- they ought to pay the price for it. >> astounding, isn't it? just look at this woman and think, would you want your daughter treated the way this is being -- >> the daughter test usually works. >> it's amazing to me. >> i wouldn't want any woman treated that way, my daughter or anybody else this isn't about relatives, this is about social norms. but let's be realistic about this we've debased our society with the gangster rap, the music, the movies, access to pornography through the internet we're debasing our country we need better moral values. we need to start talking about what our values should be and not what they've become. don't settle for anything less than great moral values.
you can make money doing the right thing. >> start out talking about mcdonald's comps. >> there you go. >> this is where we wind up. andy, thanks, guys >> good to be here. >> ed rensi. >> dow red this morning. senior economics reporter steve liesman joins us with a look at how top money managers are feeling about stocks it's our exclusive fed survey. >> hard to top that conversation let me tell you what the 40 respondents are looking for when it comes to the market this year that's a stock market that's weighed down by maybe more from the fed as well as higher interest rates in the economy. yesterday's close, 2854 on the s&p. ending this year 2937 or about 3%, i guess, after today's selloff. it's 4% higher and then 5 or call it 6% higher for 2019
not a lot of gains left according to this group which, by the way, has under stated the rise in the market over the course of the past year. let's take a look at they think the fed is concerned about market valuations. they're most beneficial. that's up from the prior survey from around 70%. they don't think the fed ought to do anything about it. if you look over here, 64% say, no, the fed should not raise rates to cool markets. mike england from action economics writes in, the stimulative effect of a tax law change has likely been underestimated in the market what about the outlook for interest rates start at 269 and i put this on here this is where we were a year ago. what the expectation was for the ten year this year 343. well, now it's gone up but it's still below where we thought it was going to be, say, about a year ago 307 is the outlook for the ten year, this year 3.44 is the outlook. 2019 taking a look at the outlook for the fed itself
2.2. that is a little higher by a quarter point. 2.8, 2019. long run rate of 3.2 a little bit above where the fed is kathy bostjancic, new responder for the first time since the fed started tightening the end of 2015 economics are no longer getting easier the outlook for better economic growth so those two things, it's a bit of a tug of war. david? >> steve, thank you. steve liesman back at hq. coming up, we'll have much more on the health care initiative that's a good word for it. we'll discuss it with bill george
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unh and aetna together have more than a quarter of this see it down 2.5% that's down significantly more than the xl which is the broader sta s&p health care. interesting is the providers have been in the leadership sector within health care for the last year. if you look at this against the pharmaceuticals, biotech and broader health care etf it has been up much more than those guys therefore, a lot more profits to be taken i wonder here if what we're looking at is a little bit of the market reflex similar to what you saw after amazon whole
foods last june in the retailers and supermarkets you had the first wave of reflex selling. who's affected, who's not affected we're going to back away without necessarily knowing what the actual business impact is going to be. >> certainly less than we did after whole foods. >> a lot less. these are more durable businesses obviously not an acquisition, just a venture to be formulated. >> an initiative. >> thank you, mike mike santoli >> let's get a news update with sue herera. >> hello here's what's happening at this hour russian president vladimir putin said the u.s. list of top rush shoon officials to be sanctioned by the u.s. harms relations between the two countries. with 12 minutes to go before a deadline the trump administration released a long a it waed list of people who have
flourished under putin palestinian protesters bursting into the bethlehem chamber of commerce in the west bank to stop a meeting between u.s. officials and officials representing the private sector in the west bank in gaza no injuries. turkey has cleared two villages turkey launched the military initiative on the 7th. take a look at this. the tech giant amazon unveiling the newest building. a design that literally designs working outside the box. it is made up of four spheres making up a massive urban oasis. that is beautiful. it took five years and $4 billion to build looks like it was worth it carl, downtown to you. >> open the spheres. >> exactly >> thank you
when we come back, dow's off session lows down 247. we're going to be joined by we're going to be joined by ronald kruz szewski when we oh, and there's the closing bell. we're going to be joined by ronald kruz szewski when we (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, return
stifel shared earnings that they beat expectations there's a 20% increase in the quarterly dividends. we're joined on the cnbc exclusive this morning by ron. >> how are you >> good. what do you make of the selloff. it's rising interest rates, spooking the markets do you agree with that >> look, first of all, this market is never going to go straight up. look at financial conditions the market is up, the dollar is down, global economies are growing. it's great forex porters
housing is healthy fiscal stimulus and tax. you'll hear about infrastructure tonight. i think the market is poised to do well. >> let's talk about the markets. you mentioned the economy and tax bill you had to report a loss because of the tax bill, right that's a one-time thing because of the deferred tax assets that now become less valuable because you'll pay less taxes in the future, right? >> exactly look, almost every financial institution dealt with that. we have a great records earning 22nd consecutive year, record revenue, record profits across the board. i'm pleased that what we really are. we're a mirror of what's going on in the economy and the economy is 2018 is stacking up to be a good year. >> can you give us some insight into the little guy?
brokerage. how much has the retail investor participated to this point did we see them get in at precisely the moment when we start to see a selloff >> no, i don't think so. look, our clients are long-term investors. everyone's participating i think that you see more of that in the discounters than you do in the full advice firms like ours we've had our investors invested for a while. they're doing pretty well and are pretty happy right now. >> ron, you are the largest provider of u.s. equity research 1300 companies are covered at stifel years ago i can remember covering wall street when largely research was done basically to engender investment banking business that's no longer the case, but it became a lot less profitable. why is that central to your strategy >> well, look. it's been difficult because passive investing has had such a run, but i believe that's about
to change. i think that active investing is going to have a rebound here in 2018 for the simple reason you're going to pick tax winners and losers and i think research is important and it is much more important when you get into a stock picking market which this is going to be this is going to be a stock picker's market. research is going to matter. >> are you getting paid for it do you think you're adequately getting paid for that research >> you know, i don't ever -- i'm never sure i get adequately paid for anything it's gotten to be a tougher business, but i do believe that we have a solid foundation we have great research and we do get paid for it. >> hey, ron, yellen's last meeting this week. a lot of people say she's exiting with as pretty much as close to the dual mandate as you can get regarding employment and price stability, but i think it was barclays chief said we've got a monetary policy that still seems like it's in the remnants
of a depression era. are you taking the over on hikes in the next year or two? >> you know, i think that -- i think the fed is -- you know, has some challenges here i think chair woman yellen has done a phenomenal job. the new chairperson in powell is very similar look, markets don't die of old age. they usually get killed by policy mistakes, often the fed the fed has an interesting things to navigate here. you have inflation ticking up. you have a lot of stimulus, both fiscal and financial conditions. i think the fed has its work cut out for it in terms of appropriately raising interest rates. >> did you hear the news this morning about jpmorgan, berkshire hathaway and amazon starting a new initiative. do you have any thought i get it, that's curious, i wouldn't waste my time?
any thoughts >> well, you know, you take the largest financial institution, you have amazon that likes to say, you know, your margin's his opportunity and one of the smartest investors and i would say when you put the three of them together, i would say i get it. >> thanks so much. good to have you on. >> thank you let's have a great day don't get short this market. >> all right >> pretty definitive. >> all right >> when we come back on that point, dow is well off session lows down 229. we'll talk more about that massive health care initiative between j.p., amazon and berkshire teaming up with former berkshire teaming up with former medtronics ceo bill george here the alerian mlp etf can diversify your equity portfolio and add potential income. bring amlp into the game. next
jpmorgajpmorgan, berkshire h care and amazon forming to have their own health care company. any time they do their own thing they have news in particular, they have over a million employees between them not to mention of course the men who run those companies are amongst the three most influential business men in the country. beyond a one pager, don't have much to offer you. what do you make of it >> well, i think they've been very coy in not telling us i'm a little surprised they went ahead with making an announcement without saying what they would do. never under estimate the power of jeff, jamie, warren start with their employees we need employers to step up and
change health care rather than sitting around and waiting for the politicians to do it, they're not going to get it done. if they can transform health care for the 1.1 million employees, then they can form a company to do more they have a start by disintermediating the system, a lot of the distribution system, buying directly from pharma companies and frankly contracting with major health centers. they're not going to be a hospital so they could contract with a kaiser or some of the major centers around the country in new york, rochester, minnesota, some other places to bring their best health care to the employees. the key is getting employees healthy. everyone looks at the costs. the costs are three times that when the employee is sick with a bad back they become obese and wind up with diabetes, they wind up having surgery we need to get employees healthy first. that's what they could do to bring this together and bring a coalition together of true health for their employees and
then take that out to other employees and people like walmart and others to come in and that should be a buying consortium but focus on how to keep people healthy, not just focus on sick care when they do get sick they should go to the major centers, not a community hospital. >> on the stock market side, somebody that used to cover health care stocks at jpmorgan, what do you make of the response do you think it's deserved the significant decrease we've seen in a variety of health care related equities >> i mean, i think it's a little bit over done, to be honest. they're really throwing the baby out with the bath water. we know very little about the deal we know that they're going to focus first on the 1.1 million employees. two things, number one, greater health care access number two, at a lower cost. from there we'll see where they go but really amazon will be the new marketplace to provide some of these items whether it's drugs, whether it's durable medical equipment. the affordable care act, i will
note, the trend over time has been to keep people out of the hospitals, number one, and number two, to align incentives between physicians and hospitals and post acute providers and the government has had limited success with that over time. it's early innings now you've got three big companies with deep pockets and smart minds who are like, heck, we're going to take this on ourselves. there was very little in the affordable care act that impacted the employer. there was some preventive health provisions and some bits and bobs, but really this is the -- >> our colleague, meg tirrell sent around a note and isi argues that this section of the market should trade at a discount to the overall market the question is, how much. i mean, do you agree with that premise? and it's got to be about amazon getting in here to do all the things bill jordan is talking about. you brought up about
disintermediation. should we discount these stocks until we know what the heck is going on here? >> i think it's too early. i really do. i think the response is over done i think the reality is is for the last few weeks and months, as you know, investors have been waiting, waiting for what's amazon going to do now we have an announcement that's probably a little bit less like what people expected and i think the expectation is, sure, you start with 1.1 million employees and then you expand on that over time i think with employee health care what do we see? high deductible health plans and consumers making more choices but with very little information. it would be nice to know that you can get a knee replacement for not $50,000 but $9,000 at a facility and having more access to information and i think that's what this will do over time is create -- create transparency, which is very much needed >> yeah. >> bill, one reason -- bill, one reason why they went so early --
they went early in the process here with this to make it public, in part it seems because they want to attract other interested companies do you think they'll get them? would you sign on were you still running medtronic, for example >> sure. absolutely if they're going to focus on employee's health, i don't want to have that knee surgery. they don't need to have that knee surgery if they stay healthy, but let's go deeper i think the market overreacted for instance, unitedhealth down at the opening team with unitedhealth, team with cvs that's the partnerships they need to think about because these people have tremendous knowledge and can bring them, they're working towards the same goal i say bravo. more employers like a walmart, general motors i hope will join in to this consortia then they have to figure out, how do i keep the employees healthy? that's where we're going to cut health care costs, that and
negotiating harder and disintermediating. >> right bill, ipsita, thanks the effort announced today they say is in its early planning stages we want to emphasize that. thanks to you both >> thank you we have a quick reminder for we're going to be talking more about how amazon among others is entering the health care business our first ever healthy returns conference in new york city. for more information and tickets go, to contraction nbc.com/heals >> let's go over to jon fortt. >> f.a.n.g. investors take notice we have the head of germany's anti-trust office. going to talk to us about why thhearok may have gone too f wi t targeting and what
talk to one today and see why we're bullish on the future. the energy conscious whopeople among usle? say small actions can add up to something... humongous. a little thing here. a little thing there. starts to feel like a badge maybe millions can wear. who are all these caretakers, advocates too? turns out, it's californians it's me and it's you. don't stop now, it's easy to add to the routine. join energy upgrade california and do your thing. let's get to the cme group in chicago and check in with rick santelli and get the "santelli exchange." >> good morning robert heller, ex-fed governor. first day of a two day fed meeting. thank you for joining us >> good morning. >> good morning. listen, we should go through the formalities.
today is an important day. first chairperson to be a female, janet yellen, has really come along way considering how much uncertainty there was on normalization, the job is nowhere near complete. but her last meeting, that will dominate some of the issues today, don't you think >> absolutely. it will be big good-bye party and a wonderful sendoff for her. >> i got you let's get to the real meat on the bone here. you believe that four rate hikes for 2018 would be appropriate. although, you think three is possible before i even question the notion of how many tightenings, the dynamic means that full of the fed raising rates is still more powerful than response on the long end of the curve. it still remains rather flat my question to you is thursday we learned the balance sheet at $4.441 trillion was only $11 bill less than a year ago. i know that it is just the beginning of reduction but boy at that pace, the long
end is going to be left out in the cold is the fed going to invert the curve? >> it may well happen. but i think the entire curve should be lifted up. the short end should be higher by about $1150 basis points and the long end, in the same magnitude. we have a very strong recovery going. inflation is picking up just a bit. so the days of low long term rates, i think, should be over and the long rates, they should be long term treasury should be at 4.5%, in that ballpark. >> now robert, bob, i agree with you. i totally agree with you but yet even though we're now at 271, the highest yield since april of 2014, it still commensurate with the economy you depicted wouldn't it be dbetter to accelerate and match the selling of the balance sheet in real
time with the rate hikes and real time otherwise the distortions of the curve can work against policy? >> well, once the full runoff is in place, we're talking about $50 billion a month runoff that's $600 billion a year that's a sizable amount. and it's probably an appropriate amount could you do i will still faster go to a trillion a year and run off? well, you're pushing the envelope there a little bit. i think $600 billion a year will be significant amount and once you pull that much stimulus out of the market, long rates will go up. >> i got you, robert listen, real quickly we're out of time. do you think we'll trade over 3% in the first half of 2018? yes or no? >> on the fed -- on the ten year yes. >> excellent bob heller, always nice to get a