Transcripts For CNBC Squawk Box 20180103

Overnight in asia, the nikkei was closed for a bank holiday. If you look at the hang seng and shanghai, both with green arrows shanghai was up by 0. 2 . The hang seng up by 0. 10 looking at europe this morning, a bit of a mixed picture ftse slightly negative you can see both the cac and the dax are trading higher up by onethird of a percentage point each finally look at treasury yields. And yield weve been watching so closely on the tenyear, this morning sitting at 2. 451 . A couple things we are watching watching a lot of things airlines are celebrating the gop tax plan southwest and American Airlines both announcing they will give 1,000 bonuses to employees following that tax overhaul. Southwest specifically announced it will use the tax savings to buy new planes the company saying it intends to reinvest in the business, reward Share Holders and increase its investment with boeing to support future Growth Opportunities. The two Major Airlines are the latest businesses to pay bonuses and pay hikes along with comcast, wells fargo and Fifth Third Bank antigovernment protests continued in iran overnight. Today Iranian State tv aired footage of pro government demonstrators across the country. The rallies come after the ayatollah blamed protests on meddling by foreign countries. Wiare we not doing it now . North korean tweet i would have put that on my list i did it at the top. I know. Thats why i didnt know if we were going to do the whole thing. You can you remember the last guy, his name was khomeini. This is close enough you can do that. The sweater doesnt help with the prompter youre not in the mood to be nice i am. But its the ayatollah comekhomi ant financial, which does not translate well to a small, tiny its not an elephant financial. Its a tiny firm that doesnt control a lot of money yeah. Moneygram remember vega . No go vega in japanese was piece of crap it was the nova nerve i ha chevy nova in spanish meant no go doesnt go this is i dont think it was named after the tiny insect. Moneygram says its proposed 2 1. 2 billion acquisition by ant financial has been called off after the deal was rejected by Regulatory Panel they failed to get the approval of the committee for Foreign Investment in the u. S. , which reviews foreign purchases of u. S. Firms for National Security concerns and financial is an affiliate of abrams alibaba and is i thought jack ma was personally involved. Its a spinoff. Hes in control of it yes alibaba is the controlling shareholder. I thought he was. I dont know if he is personally Alexion Pharmaceuticals say it will work with Elliott Management to fill an open board seat last month the New York Times said elliott built a stake in alexion. Novartis says the fda granted break through status to treat Breast Cancer in premenopausal women. Break through status means the fda will expedite the development and review of a drug when i say elliott, et, that reminded me, i have gotten through the first season of stranger things. It we minds me of et as you get into it. I watched the First Episode of the Second Season did you watch the whole i havent but if youre an et fan, and you you subscribe to hbo, watch the documentary about Steven Spielberg i dont like docs you wanted me to watch there was another one you wanted me to watch. Its two hours, its about Steven Spielberg, but the creation of et in it, and how that happened, why it happened, totally different than i ever expected you told me to watch another its a totally different story. Do you know the marketing side of the story . You told me to watch some other documentary. About the russian doping scandal. Thats outrageously good we got a lot of nice viewers i love documentaries. About the russian doping scheme just in time for the olympics go watch it can i go back to the marketing story . You need this research, because you are going to the olympics and the russians are not going. And the North Koreans may be. Speaking of becky wants to get in on et i got in trouble last time i said this because i messed up what i was saying. The story is for et, they wanted to ms. Right and they couldnt, so they used reeses thats when you said reeses penis. I did it was an accident i was trying to say pieces peanut buttercups. Wont let it go we still play it. I still say that. Talking about north korea, we have a lot of news from there this morning n north korea reopened a border hotline with south korea that had been closed since last february the move comes a day after south korea proposed highlevel discussions and hours after a tweet from President Trump eamon javers joins us with the latest good morning. Heres the tweet from the president that came late yesterday on north korea the president issuing this saying that north Korean Leader kim jongun just stated that the Nuclear Button is on his desk at all times. Will someone from his depleted and foodstarved regime please inform him that i, too, have a Nuclear Button but its much bigger and a more powerful one than his and my button works. That tweet from the president attracting a lot of criticism as being too childish and needlessly risky in terms of provoking the ridictatodictator defenders say hes taking a hard rhetorical line against north korea and that might provoke change against the nxz enorth kn regime the president is seeing some action against companies American Airlines handing out 1,000 bonuses because of some excess cash from the tax reform and that they will reinvest into their own businesses its not clear with the Trump Organization itself will do the same thing i asked Sarah Huckabee sanders about that, she said she couldnt answer that question from the white house podium. That had to be for the Trump Organization i also asked her whether the president thinks companies in general should be paying bonuses to their employees now that tax reform has passed. Heres what she said he hopes that companies will either give bonuses to their employees or somehow reinvest and bring business back into this country that was a big purpose and goal of the tax cut bill which weve seen play out over the last couple weeks expect to see more good news come from that we emailed folks over at the Trump Organization for comment about that companys plans in terms of tax reform and whether they will be paying bonuses to their employees. Well let you know when we have response nothing yet. Eamon, appreciate that. The whole thing was fascinating yesterday. On all ends of it. Huge story for the olympics if that happens. Huge story for the olympics, yes. But the tweet is also a huge story. Its just do you know whether his button works i dont know i know ours works. Ill tell you that much. I know that its its patently crazy to be tweeteding like that. Im sorry. Kim jongun jongun saunonga button ready to go but some sense of civility, some sense of how you operate in a global world as a model to other even to children. The whole thing is so i dont know you think i thought it was fine i liked it i did. You liked it. I did i think its difficult to think it doesnt concern people. With the hyperbole that comes out of north korea we tried for 25 years the other strategy we have gotten nowhere i apologize andrew, every tweet you have a tweet every day to roll your eyes at but this tweet is so particularly indefensible. No the last one was so youre offended by every tweet that comes across from this guy. You know what you dont even like 1,000 bonuses because its permanent i like the 1,000 bonuses you said i want wage increases, not bonuses you were sitting next to steve liesman, thats who said it you, too. I nodded. This is at a level its like me and obama. We are talking about possible nuclear war, and this guy is basically saying mine is bigger than yours thats what this is about. You think thats a defensible position we have a lot more capability in terms of Nuclear Weaponry and the and knowing that ours will work. Im not convinced i dont think its a debatable point. You have another side of it. Theres nothing defensible that trump has done in 13 months in your view im concerned when you start joking around about nuclear war. Its not joking around. Saying you have a button you dont think the United States its brinksmanship. Its not brinksmanship either what do you think it does to the position of this country on the world stage . What did how was our position you think other people look at this and say, my goodness, this is the guy running the country . Im sorry. What about the appeasement of Foreign Policy for eight years do didnt help did nothing there were apology fourstor eight years. But theres a way to do it without being quite as this is who this guy is get used to it its going to be a couple more years, maybe a couple more after that if he gets impeached, then youll be okay then you have mike pence who may be worse just this particular situation, its highly indefensible its shocking that anybody could sit here and say that every tweet he made, you said it from fine. But this youre not getting used to him yet . Thats the worst part about it youre so outraged everybody time we have to sit here and watch it this has become normalized . I guess so. Not to you im glad. Im so happy im so glad its not normalized for me okay i hope it never becomes normalized apparently not. Your feigned outrage every morning, we can sit through it. The good news, its genuine, not feigned. It will be for a while. It might be fine. Senator orrin hatch the tweets will keep coming. They will when he cant get fair coverage anywhere else, thats how he will approach it. I know it. Are you looking forward to the monday awards ceremony the fake news awards on monday maybe well be on it, or ill be on it i wish we would be on it. Were a dot on the radar screen. Unless youre fox, fox and friends or cnn but New York Times. Probably not you ill take what i can get. Orrin hatch announcing yesterday he will not seek reelection in november. Hatch is the longest running republican in senate history, first elected in 1976. 83 years old he said every good fighter knows when to hang up his gloves his retirement opens up a potential bid by mitt romney one of the harshest critics of the party of trump he did not comment on a potential bid but yesterday he changed the location of his twitter account from massachusetts to holiday, utah back to the Broader Markets. Joining us is Karen Cavanaugh from voivoya investment managemt we have kevin mcbride, and we have bob habbercort. Welcome. Karen, we have to talk about the equities market. What we saw yesterday, just one day of trading the first day of the new year, things got off to a strong start with new records across the board. With the naz dosdaq crossing 7, for the first time ever. Was this the right time to get in what do you expect for the rest of this year i think it was the right time to get in. Well see more of that the pro growth policies unleashed Economic Growth. Tax cuts, deregulation, and well see more of that well see businesses being spending Capital Investment thats been missingin gdp. Thats why we have not seen productivi productivity, weve seen low growth i think well see more of that its not just here in the United States, but game on to the rest of the world well see pro business policies there, too in order to keep up with the u. S the u. S. Will flow all boats, theyre the biggest economy. We also have china and the eurozone doing well. So good things are in store and i think investors are just being too skeptical. We heard briefly a few Companies Giving us guidance saying based on the new tax law that they think things will be stronger do you think well hear a lot to of that . Yes, i think well hear more of that and earnings estimates will ratchet up. We see Forward Guidance that will be positive thats good for the markets. The markets will move ahead because the economy is moving ahead, earnings is moving ahead. This is a year where the economy is keeping up with the market. This will be a change. I think investors are not used to that. We almost have stockholm syndrome, its low growth. Oh, its 2 . Thats not okay. In fact, we missed out on a lot of Economic Growth we talk about the deficit and say this 1. 5 trillion hole in the deficit. What about the other trillions weve missed in lost growth. Opportunity costs. Nobody seems to worry about that it is an actual cost where does that get you for the end of the year expectations for the markets . I see the s p moving ahead. About 2900 or so i think we should see a bit more volatility, especially as the fed tries to become a little bit more normal. Were still not in a tightening cycle. Its more getting back to normal i see yields moving up, moving up to about 2. 7 for the end of the year overall, thats a good back drop for stocks i tell investors, always make sure you have your bonds, you never know when well see volatility lets talk about that, the fixed income market. Were looking at a year where you expect the central bank to raise rates, wonder what that means for the bond market and what youd be telling people to do now i do think its going to be another year with an active fed. I do see rates moving up across the yield spectrum but further flattening of the curve because of the active fed. I have the tenyear treasury ending the year at 2. 8 still not breaking through 3 with the fed hiking. No, we may touch 3 , but when the dust settles, the tenyear ends the year at 2. 8 . The oneyear at about 2. 5. And the twoyear nearly flat with the tens. We get some juice added to the economy. That adds an uptick on the Inflation Numbers. But with the fed thats active on the short end, i have them raising rates three times this year thats where you get the further flattening of the curve. Thats something that concerns people most of the time you dont sound concerned about it i dont think well be concerned about it through much of to 2018 as we sit here we may be concerned about a slowdown in growth we get some juice this year from the tax cuts 12 months down the road when were in a mode where the fed is activity tightening, pushing the fed funds rate above the rate of inflation, we may be more concerned about slowing growth in 2019 as opposed to the faster growth for 2018. Karen, you went out on a limb and said positive things about the taxes. But when it comes down to the s p gains, 7 . I guess 7 were at 2700. Im trying to be conservative would it shock you if it was 3500 no. As a sell side type, you might as go 7 , 8 but in your heart of hearts, it wouldnt surprise you to see another big year i think these pro business policies will unleash growth we have not seen that before i love the stockholm syndrome a lot of people that have the stockholm syndrome have avested interest in keeping the stock hostock stockholm syndrome i think we should grease the kids for Corporate America to compete globally eventually it could mean more jobs better jobs and productivity. Thats what weve been listing gold, bob, why do you think gold is the unknown story behind this gold now, the theme will be very similar to 2017 its a fed year. Fed will do three more rate hikes. What typically happens with gold and the fed, it trades lower into the fed with these rate hike announcements i think that will make this year similar. Right now for the year, gold started out strong this is seasonal now you buy gold middle of december, you sell it around the middle of january. You know, ahead of the fed the thing thats different this year is to keep an eye on the cpi data were starting to talk more about inflation now. Specifically in wage growth. Well see what comes out this friday if thats higher a few months back we saw higher wage growth, which ticked gold up cpi was 1. 7 in november. If we get a reading january 12th of 1. 8 or north that would add fuel to the fire for gold to the upside be mindful that higher inflation will warrant a more aggressive fed in 2018. I think its going to be a back and forth this year. I heard crazy predictions that gold, because of the way the year started, that well see it north of 1500, 1400. I think it will be a sideways market this year the way to play it is to buy it on the fed announcements, hold it for a week, two, three weeks, and then look to be shorter out of it if youre bullish a few weeks before the fed announcements. Be mindful of inflation. You know, there hasnt been much inflation in eight years but i feel like weve been talking about it more the last couple of weeks. Bob, greg, karen, thank you coming up it was a brutal year at the Box Office New numbers show where people are getting their entertainment. Those details are next an Alaska Airlines flight was canceled after a rat jumped from the jetway on to the plane. Passengers who boarded got off the plane. The airline took it out of service until an exterminator could certify it as rodent free. The aircraft will be inspected for damage most of the passengers were rewarded on a later flight just wanted to tell you about rats squirrels are not that different. And chipmunks chip mufrpg munks got into our e time rats get a bad rap. They have beaty e y eyes do you remember the movie over the hedge, they had a squirrel just those weird movements make me hyper i dont think i love dogs, too. But pigs are just as cute as dogs pigs are smart. Cows not so much. Rats are ugly theyre ugly. But they get a bad rap, except with willard. Talking about movies, can i segue . Bleak year. Bleak year at the box office. Total ticket sales sold in 2017, 1. 2 billion, a 5. 8 drop from the prior year, and the lowest total since 1992 its being blamed on a weak lineup and the rise of streaming services and the ease of athome entertainment. I think the athome entertainment thing is finally its real 70inch screen. I cant tell you how often i say to myself, can i just watch it at home i see the ad, ill watch it at home did you see dunkirk i have. Waiting to see it. Incredible. Saw it at home. It was great i saw it on a plane, now i want to see it on a big screen at home. But i guess it would be great in the movies great. What a great movie very well done. It really is. You were not triggered by any of the the one nation trying to win over another . That didnt trigger you . I was not triggered you know who you would have hated . Churchill you think he said stuff about the germans. Churchill was a bad guy if we normalize churchills behavior, were in big trouble this snowflake over here youre melting. Its zero degrees because of the Global Warming coming up, deadly protests in iran continue the countrys clerical leadership blaming the United States an update on the protests next more on squawk box. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Good morning welcome back to squawk box on cnbc look at u. S. Equity futures at this hour. Lets show you whats going on dow opening up about a point higher nasdaq looking to open higher, 4 1 2 points higher. The s p 500 up about a point the dow was up almost 50 last time we looked at it now up 1 it was up 5 is it a fair value thing. Yeah. The fair value is up 47 i look at it early in the morning, i need that but i dont. You dont get it a lot of places achlt lot of the radio stati stations dont understand it in geopolitical news, antigovernment protests continued in iran overnight, but today Iranian State tv aired footage of pro government demonstrations in cities across that country the rallies come after irans Supreme Leader blamed the United States for protests that killed more than 20 people. Nikki haley says it is complete nonsense now American Companies have started no American Companies have started doing business in iran because of the Nuclear Agreement. Michelle carusocabrera is here. Could be our fault, we gave them money pallets of money. Which their citizens thought might be used and ben rhodes, pt would be used for butter none of it was used for that maybe it is our fault. We gave them money that could have been used domestically that wasnt i think its clear the situation maybe didnt work out as some people had hoped what about back in 2009, not saying that maybe this maybe during protests at the time were they anticipating doing the deal with iran to get the nobel prize for john kerry do you understand . Thats possible im here to talk about what is the state of American Business in iran. Cant get you to weigh in on this you know, you and i rarely disagree on certain things can you hang out here for a while . No. All right. So, as the situation in iran has unfolded, we wanted to check and see what the status of u. S. Business ties were in iran boeing is the most prominent American Company to do a large deal with iran in december of 2016 boeing and iran air announced an agreement for 57 with iran, thed tended to purchase 30 6737s there have been attempting to stop this deal, though its still on General Electric went into iran with some businesses they have not gotten back to us with the update on those businesses we did a search through every single earnings call, every single Earnings Report for all of 2017. A search for iran, the word, name of the country barely comes up except when it comes to boeing the Obama Administration released a list of companies and nonprofits that got waivers to do business there back in 2014 a lot of healthcare companies. We checked in with a lot of them not a lot to talk about novartis had gotten a waiver. They have spun off that division, a Vaccine Division they say they have a Distribution Agreement with a company in iran but results negligible volkswagen, pugot, renault, they are importing or manufacturing cars there and French Oil Company total got in there almost immediatelyctioe signed there was an embargo in place since 1979 even though the Nuclear Agreement lifted some sanctions, there were still a lot of sanctions in place because of their sponsorship of terrorism how big of a market is it what are we talking about . Its 70 Million People. So its a substantial number of people its hard to know because we dont know much about the gdp. Were not sure we believe in the statistics they put out. Theres doubts about the inflation statistics that i was talking about yesterday. Certainly its a consumer hungry market there are so many tariffs on foreign goods that you can imagine if those were reduced there would be a lot of demand for outside products you were right about the motivation so the domestic population in iran is fully aware of all of the money leaving the country to further Foreign Policy goals one of the things theyre chanting is dont go to syria, leave the money here for us. Yes thats all the reporting coming out of there is about, some protesters were complaining about foreign intervention around the world because the economy is so they have nothing, i guess and they were promised a better economy. It should be better considering. Considering the level of education. The palaclets the oil it should be better than what it is lets bring in joel rubin former Deputy Assistant secretary of state during the Obama Administration now a visiting fellow of carnegie melon university. Thanks for joining us. Is there a good morning. Is there somewhere between the way that the Trump Administration is approaching this and some way the Obama Administration approached it in 2009, is there a sweet spot in between the two . This is a momentous moment. Just taking a step back, its important to recognize that these are the most significant protests in iran since 2009. They have the potential to be the most significant since the 1979 revolution. And what were witnessing is an organic iranian protest against their government, the regime, against what it stands for, and we dont really have a lot of influence on how the people in iran act we need to be careful about avoiding being perceived as instigating this and tainting these protests, which i fear were heading into that direction. And were not really leading with our allies or giving enough space to the protesters to make their arguments. Were starting to make this about us that can undermine the momentum were seeing now you have now sort of circled around the original question that i asked you there is some criticism for the wait and see quote from president obama in 2009 where the this movements which could have been who knows what could have happened it wasnt about us but it might have been a moment in time where this very repressive regime that has not been great for the world, i would say, or great for the United States, where that could have been the seed of something if we had not been so stand o offish is there something that says whatever they do is up to themselves, versus we support the protesters, we support market reforms you cant do that without looking like youre like youre incendiary . No, there are clear ways where we can help facilitate this, not make it about us i would agree with you on that for example, the targeted sanctions route which we are currently engaged in through the act that identifies bad actors, we can identify those calling for oppression in iran against the protests, sanction those individuals. We could be ensuring that in Silicon Valley that a telegram being used by iranians to communicate, thats continued to be used and not hacked we could be engaging with allies to have a more coherent unified International View of this my fear is that right now, in the previous segment you touched on it, that the u. S. And europe are not on the same page over the horizon we have the Iran Nuclear Deal certification about to happen in a week or so. That will impact europe. We need to pull them along with us thats where we can really make an impact. We never know what we always have to think what is europes ail telterior motives. I think about radio free europe, drops flyers, tear down that wall, where we stood up for we could have been perceived address meddling in any of those situations, where were piping music in or, you know, where we try to grease the skids for these things to happen i dont know how this is different in this case one of the openings here is the iranian people themselves are calling for a better a economy, a more transparent economy. They dont like the regime thats clear we shouldnt be supporting the regime what we need to do is find wedges to open the economy i would argue the last thing we should do is close the iranian people off from the global economy. We should lean in and try to find ways to actually pull them up thats going to help strengthen us against the regime. Right sometimes that helps the regime, though its a tough thing you have to walk a fine line thanks for being with us thanks. Michelle, thank you. You have something to do now, really im going to the gym. When we come back, well talk about what bill ackman is betting on, bill ackman. Details next. At and bitcoins theyll riel wh drove the cryptocurrency yesterday. Squawk box is back after this. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. But some of us make somethinge make sommuch more. Dinner. Mom would be proud. With blue apron, any night is a chance to see what cooking can do. Time for todays executive edge bill ackman making a bet on bill ackman leslie peicker has the details. Ackman showing confidence in his firm through a tender offer of Pershing Square shares. Ackman along with other advisers and executives would increase ownership in the firm by 300 million. Pershing square is publicly traded in amsterdam and london and has been trading to a discount of net asset value. In a press release, Pershing Square called the firm undervalued by the market. Some investors may argue that discount is warranted after a rough 2017 for Pershing Square he took a 4 billion los after selling his stake in valeant in march then in november he failed to obtain a single board seat after a contentious board fight at adp, and last week pershing agreed to settle a lawsuit for 194 million reducing Pershing Squares performance for the year by 132 basis points Pershing Square was down 4 in the year, making 2017 ackmans third Consecutive Year of not having positive returns. Guys i think this will change the game for him it remains to be seen they had a Buyback Program of the shares to narrow that discount to net asset value, that hasnt done the trick for a tender offer of 300 million may narrow that discount but well see. Hes had a tough year. I dont know what it will take to make the market go on board with his plan. Leslie picker, thank you. Coming up, bitcoin bouncing back yesterdayfollowing a report that peter thiels fund has invested millions. Do you know anything about this . Did he buy it at under 10,000 . Is he Still Holding it he bought some in 17, unclear. He bought it probably at 3,000, 4,000 it sounds like hes buying it now. Im not sure thats right much more on bitcoin after the break. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Problems sleeping i have tried every pillow out there, and none of them work thats why i invented my pillow. My patented fill adjusts to your exact individual needs and helps keep your neck aligned my pillow will hold its shape all night long regardless of your sleep position for the best sleep of your life zplierchlt welcome back to squawk box. The price of bitcoin surged on news that founders cofounded by ledge endary peter thiel is betting millions on the crypto currency joining us right now for more on bitcoins Broader Market adoption is david drake, founder, chairman of lbj capital and board of several coin companies. How important is it or not that peter thiel got in this, and we dont know whether he has gotten out of it yet. I think its news worthy, and i think it legitimatizes it. We have the future with cme and cboe launched a few weeks ago, and we saw the index of 2014 people are a little resistant of getting into the futures some prime focus of pushing back thiel coming to the space is just another way of solving that its still all about bitcoin. We put in this category of crypto currency, and theres a number of people i imagine viewers who to the extent theyre playing this, theyre saying maybe bitcoin has already gotten its attention im going to jump in on some of these other guys and hope that that is where the value play is. One of these other whether its a ethereum or z cash or name your currency, emerges. What do you think of that . I think thief some of the companies dont have underlying businesses whats happening today is Real Companies are coming on board. I was on the board for naga, a publicly listed company in frankfurt. Now, more private companies are saying, wait a minute, why cant we add shareholder value by doing a token and Loyalty Programs with it now we have 15 clients calling me and saying, hey, help us do the same thing doesnt that then undermine the entire argument of the value or valuation of any type of crypto currency in that if you and i or joe or becky, we decide we want to start the squawk coin tomorrow and maybe it has loyalty points i dont know what it has on it then that will have a value and the bitcoin will have a value, and all of these will be used in all sorts of different ways. Right i mean, its software, after all. These are all software code, and people believe in that code. Its like a kid playing a game buying a token if you want to buy that token for one more dollar that he is playing on, its a similar concept here its code. My kids play a game called subway surfers do you know about this game snl you can buy coins, and you buy those coins, and you use those coins to buy surf boards right so then you can surf on the subway surfers game i probably have spent, unfortunately, i dont know, maybe about 100 over time on these subway surfer coins. My daughter spent 2,000 by accident, but, fortunately, we got it back. My point is i stopped buying these coins, obviously, and at some point they have really no value. Thats the question. Look at it this way you have the original developers who came up with the solution with bitcoin they came out with a currency. They didnt have intention at that time to be traders. Day traders. Hedge fund traders creating a speculative bubble so to say, people say, of trading it back and forth. I look at it in a different ecosystem. You have the mass market you have the traders on wall street you have the developers and the guys who came up with solutions to solve problems, which you can start it with. Theyre all meeting right now here at your desk, and theyre colliding. How you are discussing it its hard to you know, you cant help but think of the philosophically what were talking about here, and people thiel compared it to gold, and even if you think about gold and the value that its held over thousands of years, its not really because it can be turned into jewelry thats not why gold is worth something. Its because theres a finite amount, it does take the place of paper money because simple bankers cant make more of it. Then its a similar way that i think bitcoin is it might be similar if it is scarce. I can see how it almost does relate to gold as an alternative to paper money so far i cant get my head around whether its really worth something. Joe, i agree with you new asset class brand new. Do you like gold . No. I think it has certain intrinsic value, but gold will never be replaced capital will never be replaced currency wont be replaced this is a new concept. David, thank you. Nah. Not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. Call for a free kohler nightlight toilet seat with consultation. Or visit kohlerwalkinbath. Com for more info. The nasdaq breaks through 7,000 aztec stocksralry to kick off the new year more on the latest market moves straight ahead could amazon make a move to buy target target target 2018 the bold call by gene munster had both stocks on the move. The influential analysts will join us to discuss that prediction and much more does it feel like were going to dinner with the ministers, do you think they say that gene munster were going to dinner with the munsters the president telling north korea telling kim jong un that he too has a button that is bigger and more powerful and his actually works squawk box begins right now. Were live at the Nasdaq Market site. Andrew ross sorkin along with becky quick and joe kernan lets show you some green arrows across the board, but the dow has it dipped into the red just briefly here dow down about six points. Nasdaq looking to open higher. Three and a half points up the s p 500 would open just marginally higher as well. A couple of headlines to bring you this morning the first economic reports of the new year, they are due today. The institute for supply management will be issuing its monthly manufacturing index. That happens at 10 00 a. M. Eastern time the government issuing november Construction Spending at the same time. Also, were going to be getting december auto sales figures. Economists surveyed by edmun edmunds. Com. Investors hoping to gain an insight into possible rate hikes in 2018. Music streaming Company Spotify has been sued by wixen Music Company for using thousands of songs without a license. They license songs like freefalling by tom petty, and theyre seeking damages of 1. 6 billion. They say that spotify failed to get a direct or compulsory license that would have allowed it to reproduce or distribute those songs. Spotify is said to come valued at 19 billion airlines will pay 1,000 bonuses each a gesture that american said would cost 130 million because i think they said to 130,000 employees. Southwest also said it exercised pgs ones to buy more new jets from boeing. Although it did delay orders from some others shares of southwest have risen more than 30 over the past year in case you were wondering 2018 starts off with a recordbreaking session dom joins us with more so, andrew, you know how much we love large numbers and round numbers, so nasdaq 7,000 is a big one. We close for the first time for the nasdaq composite for that key 7,000 mark, and its pretty interesting because of the grander scheme of another big move in the markets overall. The s p also setting record intraday and closing highs yesterday. We want to talk a little bit about the companies that are powering the gains because for thats two market cap weighted indexes, these are the stocks that are doing the most in terms of powering the gains. Apple shares up 49 . Alphabet up 39 . Microsoft up 3 . Amazon, 59 . Facebook, 59 . Each stock is above a half a trillion dollars in market cap each these are the ones that are really doing all the heavy lifting as these stocks go, so go the market. These are nasdaq 1 00 stocks as well as s p 500 members. As for whether or not they will continue to do that, check this out. We looked and asked them to show us what the average analyst target prices are for each of these massive stocks, and what the potential up side is if you look at the average analyst target price, right now apple shares could go up another 11 if the analysts are right. Alphabet shares up another 11 microsoft up by 8 its already had a pretty good run. Amazon up by 9 , and facebook by 15 . Facebook could do a lot more work than some of the other stocks if the analysts are correct. Of course, analysts are always changing their target prices whether or not they start to lower them or raise those prices will have an impact here, but, still, these five stocks could do a lot of work if the analysts are right about where these stocks go over the next 12 to 18 months back over to you dom, thank you. Joining us now to discuss this and other things, brian levitt, Senior Investment strategyist at Oppenheimer Funds, and covering the economic angle, seth carpenter, u. S. Chief economist at ubs seth, i want to talk to you just philosophically about something. Its a discussion weve been having over the last couple of days, and that is the end of a Business Cycle weve all heard that they dont die of old age is it always inflation that eventually causes the fed to hike to a level that slows things down and causes a recession . If so, it seems like thats still so far off is it still clear sailing for years now . I dont know about for years, but we dont see much of a chance of recession over the next year. In fact, it usually is inflation thats causing the fed over various Business Cycles start to raise Interest Rates i think the question becomes how fast they have to do it and how well calibrated those rate hikes are. Is it always inflation that puts a top on or that spells the end to an expanding Business Cycle, or could it be i mean, i guess in 2008 it wasnt inflation, was it . Yeah. Look at the last Business Cycle. We had over building in the real estate sector. We had when those burst and we see this contraction in spending do you have any idea what it would do at this time . Rates are still so low people were predicting 3 last year for the tenyear. Inflation is for the record, though, ubs was not predicting 3 . Well, and also what was my other i mean, nothing at this point seems like its indicated Interest Rates and the fed didnt hit their inflation target they cant hit 2 . Thats exactly right. So, in fact, we were thinking that the fed is not going to hike as many times as the fed thinks at the december meeting and their projections that they thought they were going to raise rates about three times next year, we think theyre only going to get to it two times you are only willing willing to say it for a year the next year we could have a i would think is it possible to go off five years and say theres nothing on the horizon that would end the Business Cycle, or is that too put your hand on i awallet any time an economist tries to sell you their fiveyear forecast lots of bad things happen to good economies lets do it that way it feels like in the next year were in good shape. We see job creation going on Interest Rates are still low inflation remains low. Theres room repatriation. Companies doing some things, and money i know that the 1,000 is only a oneshot deal. To families that are making 50,000, 60,000, 70,000 a year 1,000 makes a difference, does it not i suspect it should make a difference to some people. I think one real important question is what would have happened whats the counter factor . It seems hard to believe that companies are in this business for altruism labor markets are getting tighter, and presumably we needed to see an increase in wages over time anyway its hard to say that this why do you think theyre doing it this way, meaning in the form of these onetime bonuses as opposed to in terms of raising wages on a longterm basis . Sure. I obviously dont have insight into the executives minds one possible explanation is it makes a lot gives them a lot more optionalty. You can do it one time and then not to repeat it in the future if you dont think its altruistic, what do you think its about at some point somebody in some Corner Office decides were going to give away, you know, millions of dollars in the form of these 1,000 bonuses. Is the view that all these people are about to leave them otherwise . What do you do you hear what im saying i do hear what you are saying whats the market force going on here . Right i mean, the labor market is tightening weve got the Unemployment Rate down to 4. 1 presumably the economy keeps growing like we think it is, its going to continue to fall we see the labor force rising as more people are coming into the labor force because theyre rising wages i think its a tightening labor market thats causing firms to need to pay their workers a little bit more. Theres no massive pressure. Theres not runaway wage inflation. Its not as though this is a tidal wave thats cresting in any sense. I guess what im trying to understand is the actual thought process of the 1,000 bonus, right, thats real money its not free. You have to say to yourself that some percent if you thought it was true market force, you think some percent of your work force is about to walk out the door in the next 12 months and then, by the way, sometime by the way, this 1,000 that you are giving them today is going to preemptively prevent them from doing so, which is also a very strange idea because if you said i would give you 1,000 bonus at the end of 2019, you would have them the whole thi thing. As far as how long this Business Cycle is able to continue, its already the longest one of the longest ones weve been saying for a long time at Oppenheimer Funds that this is going to be the longest cycle on record. How much longer can you go five years, or can i put my hand on my wallet i think what you have to be careful about, when you say does it always end with inflation, if you look at Inflation Numbers in the u. S. And europe, theyre moving higher, but not significantly. These cycles are going to end with inflation higher, the fed tightening policy, the yield curve flattening, the dollar stronger, and high yield spreads blowing out. Were a long way away in our opinion from any of that happening. I think what you have to be careful with to seths point is that as a Federal Reserve attempts to raise Interest Rates a handful of times in 2018, we got to watch the tenyear treasury rate. The tenyear rate has been forecasted to climb, again, you said not at ubs, not at Oppenheimer Funds either 3 , 3. 5 its not happening you dont have the pickup in inflation. You could flatten yield kuv if you see that start to happen then curtail your expectations on the cycle short of that, i think this cycle has a lot of room to go. The tax plan for you means what for the s p by the end of the year adds how much . You are going to see about 30 i think actually markets are going to do quite well i think theyll be more volatile this year than last year be almost impossible for them to be less volatile right . And the reason they were so nonvolatile last year is because there was no real economic or Monetary Policy volatility i suspect youll see some Monetary Policy back in the markets, but the markets should continue to press higher corporate earnings are good. Economies overseas are improving and accelerating its a nice macro back drop for u. S. Corporations and International Corporations all right not going to i found a money clip yeah. Economists. Earlier they said liesman asked whats your favorite economist i could have come up with i couldnt come up with anyone i think im everyones favorite economist you are going to be, like, somewhere else, though, i think. You going to the new york fed or something . Well, no. I can neither confirm nor deny oh. Like that supposed to be no comment if you do go, will you keep coming back on absolutely. Okay. Thank you, guys thank you economwhen we come back, am has been shaking up now a bold call by gene munster puts target right at the companys crosshairs he will join us after the break to explain then surprise, surprise. Legendary investor byron wien will join us with his annual list of what you are watching squawk box here on cnbc. I alleges say correlation is not causation, but in this case it might be oh, i think its got to be. Ill take your side, and im not going to argue against it. Gene machinester making a bold prediction in 2018 that amazon would actually buy target this year. That story pushed target shares higher on tuesday. Gene joins us from targets holetown of minneapolis. Thanks for being here. Hi, becky you are shaking things up with some of your predictions. Where did you come up with the idea that amazon would take on target thats a pretty big purchase we did some work that we published last may that went in this direction part of what theyre doing with whole foods, that was a big tip of the hand that amazon really has two things, which is a highend customer and, second, and surprisingly, which ends up nicely with target second, surprisingly, they value offline i think this is the part that is a little bit of a step different direction than most people think. Ploes people think that its going to go to 10, 15, 20 years. Its going to be this huge sea change the fact is they bought whole foods and suggests that they see a future in offline we think that it wont be as big as online, but the measurable part im going to quickly put numbers on it. We think that the Online Business in the u. S. Is going to be probably 55 of retail and 45 will be off line kind of to put all this together is if you believe that, that off line still has a place, target is the perfect fit for them. To me when i saw whole foods, i thought, wait, its an Amazon Customer its trying to make sure that its giving the customer what the customer wants i mean, i am somebody who would love to have quick delivery of great food, things like that i use fresh all the time i would love to have somebody else i can play that off it wasnt that they looked at whole foods and say we see these stores, we want to go those directions its how do i find a way to get my customer more of what she wants . Im want sure that theyre going to do with that target i think there is a piece to it also, this is something really the whole foods piece to it, they have that highend quality food they were in 25 different cities with groceries that theyve been testing for the last now seven years. They did have an offering. Yet, they wanted to make that offering better. I think target kind of lines up similarly to whole foods in that sense. Almost just like a Distribution Center to get stuff there sameday thats part of it we think that, you know, you are still in the future going to want to make a stop at the Grocery Store or make a target run, and whether its a Distribution Center being out of it, or some form of just instant gratification, to be able to pick something up, i think thats important this idea that theyre going to use these whole foods or any of these boxes as distribution points, we havent even seen them start with that wouldnt you want to see how that even plays out . Dont you think they would want to see how that plays out before they make a big acquisition like this well, thats you know, getting the timing on this right is tough. This is the opposite of what theyre supposed to be doing the issue that i have with that is amazon doesnt care about profitability. What they care about is gaining wallet share again, if you look at the retail landscape, you have amazon from an online perspective and starting to flex more into offline you have the off hadline players trying to get more online. Its going to be a mix its going to be a hybrid model in the future. I think that, you know, the timing on this is always tough we think its this year. I think that the setup and the logic behind target makes a ton of sense. It seems like a big deal, but this is a very manageable piece. Are you confident are you that this is something that will happen in the next year or even beyond that . I ask it because we have people that come on and give us these predictions who they think theyre long shots, but maybe in the right environment it will happen is this something that you think it an outliar, or is there a possibility of this happening this year . This year i think its a 60 to 70 chance. If you are going to say three years from now, i think its a 90 chance i think this is going to happen because its right in line with what amazon wants to do and how they see the future of retail. So, gene, on another subject, just quickly, so you could not name your son, eddie theres just no way, could you if you had a son, you could not name him eddie probably not. There is a reboot love that song. Nbc seth myers and do you have a problem with the munsters coming back, gene you dont feel one way or another . I would love i think a lot about it. You know, outside of the name, i actually love the show ive gone and downloaded them and own a lot of them, and so im excited to see what they bring. If you and the family go over to friends house, they tell their neighbors that the munsters are coming over for dinner they would say that, right they do say that. Thats exactly very cool seth myers, joe cardman this was in august that it was in the works for a reboot. We tried to reboot it in 2012 and didnt i have heard rumors about it. Its never restarted i think its going to i think your ship is coming in, gene thank you, man thank you. Thank you herman is not a name you could use either no. Herman i like we got the music. Coming up when we return, what could markets do in 2018 blackstones byron wien will join us with his annual list of rpsefothyear you do not want to miss this trouble with coming up, President Trumps button tweet has media all abuzz this morning. People getting triggered everywhere we will discuss after the break. Then byron wien is hoere with hs annual list of surprises squawk box will be right back. Good morning welcome back to squawk box here on cnbc we are live from the Nasdaq Market site in times square. Among the stories that are front and center this morning, Dominion Energy is buying scana for 55. 35 a share in an all stock transaction. That deal is valued at 7. 9 billion. The offer represents a premium 42. 2 to scanas Closing Price yesterday, as you can see, scana shares up by 28 this morning. In real estate news, the Office Vacancy rate rose to 16. 3 in the Fourth Quarter that was up slightly from the prior year, and this is the first increase in five years United Technologies upgraded to outperfect from sector perform at Rbc Capital Markets the analyst there expecting recent margin pressures on the otus and Pratt Whitney units to subside this year. New this morning, north korea reopened a border hotline with south korea that had been closed since last february this comes after one day after south korea proposed high level discussions, and just hours after this tweet from President Trump. North Korean Leader kim jong un he usually calls him little rocket man but in this case he actually called him by his name just stated that the Nuclear Button is on his desk at all times. Will someone from his depleated and foodstarved regime please inform him that i too have a Nuclear Button, but it is a much bigger and more powerful one than his, and my button works. Officials in south korea so triggered. Officials in south korea said we should all be triggered. I have to be triggered because youre triggered i just find the whole thing so anyway you know where i stand you know where i stand. I dont have to be triggered because you are triggered, andrew believe me, thats all i would be doing is being triggered. South korea said they conducted a conversation with the north that lasted about 20 minutes, but did not disclose the contents of that call. Like i said, im just glad you werent around when churchill was talking tough because he was really i almost cant report that without i think it almost cant be reported without some type of commentary about the sort of pure insanity of what is going on i know. Maybe the 25th amendment will come into play for you we can only hope lets talk about peter thiel this morning he is making a big bit on bitcoin. He has bought millions of dollars of the crypto currency that story plooufd bitcoin more than 13 yesterday this morning youre looking at bitcoin right now almost at 15,000 its kind of where its sitting at right now the report says the vc firm bought about 15 million to 20 million of bitcoin and told investors that after bitcoins surge in the last year, those Holdings Worth hundreds of millions of dollars. It wasnt clear, though, whether Founders Fund has sold any of those holdings since then. From a 10 measures Market Correction, to a rise in global anarchy, byron wien is predicting his top ten surprises for this year as he has done every year now for the last 33 years. Byron is vice chairman of private Wealth Solutions at blackstone we love having him here early in the year always to bring us the big ten predictions. Do you want to do it top ten letterman style . We go from the top from the end to theyre not ranked. Theyre not ranked. Theyre not ranked. Before we get to that, though, lets just look at lets look at 2017 for a second sure. You got some right, and you also got some wrong, which is sort of how it gets thats the way it works why dont you go through the things that you are most proud of and then well maybe hit some that you were a little off on. Well, i think i said trump would mellow somewhat, and i think he did he did. Despite these north korea tweets maybe he is firming up in 2018 but i said the market would get over 2,500 that was a good call. The s p 500 it did i said oil wouldnt go above 60. It basically didnt. I said that generally it would be the tone of the market would be positive and although people were fearful of trump in his first year, they shouldnt be because trumps progrowth policies would be good for the market lets go on some of the things you got wrong you saw the end of the European Union in 2017, if i recall right i one of the things i got wrong was the brexit vote really brought europe close together. The European Union is stronger than its ever been, and europe is doing better than its done in some time and then angela earning maniel, you thought she was going to lose. She did lose. She did lose, but she did lose power, and she was forced to form a Difficult Coalition okay. Lets look forward 2018 top of the list. Top of the list, we dont go to war with north korea. Good. In spite of the buttons on the opposing sides desks. What et cetera going to happen on the market the market is going to go going to have that correction that everybody has been waiting for, but its going to end the year above 3,000. You have above 3,000 on the s p. But you think theres a 10 corrections on the way there right that would be a hell of a buying opportunity will anyone buy, or will they be saying its over thats the hardest thing about those, right no one ever buys at the bottom i think, look, we have a set of favorable conditions that we havent seen very often in our lifetime you have low inflation, low Interest Rates, a coordinated expansion around the world not just in the United States. The prospect of the fed tightening, but were a long way from a yield curve i think that this is going to be a good year for equities ill make it more complicated. Whats the trigger that gets you to the correction . Your 10 correction . Were seeing a certain amount of euphoria building up in the market and the market usually blows off when thats the condition. Almost everybody thinks that we have a good chance you think both . Right okay. Also, on your list the fed, our new fed chair, is going to do what in 2018 . Going to tighten every quarter four times that would be a surprise most people are two or three and it has nothing to do then with your correction either. I dont think the fed is really really has that much influence over the market right now. I think ultimately it will, but only when we get close to an inverted yield curve the folks at aramco will be curious about your prediction about what happens to the price of crude in 2018 i think crude is going to go to 80 80 west texas. That might help them with their ipo. Okay. China you know, china only has one serious problem, and that is they have too much accumulated debt if they would slow the economy down somewhat by a full percentage point, they would be able to work off some of that nonperforming Loan Portfolio thats threatening them and staring them in the face on that screen we say pop lichl, tribalism, and the next bart is the scariest part, anarchy spread globally. The anarchy part is the part im anxious about. Well, anarchy how does that matter . You have anarchy in iran. You know, the fact is that people dont have the same respect for institutions that they had a generation ago. Byron, youve heard the economy the comment its the economy stupid youre so bullish on the economy and on stock market. You think that because people dont like the tweets that theyre going to vote the house and theyre going to vote democrats into the house and the senate my only point is that why dont they vote their pocketbook why are you so sure they wont now, normally the party in power loses almost every midterm. That always happens. Right you never know by how much. It is a tough one for the senate for democrats this time around with things going so well with people getting a lot of people will get tax cuts, and a lot of people have made money. You think they just look at the at this guy and say im going to vote against im going to vote locally against trump with my local elections . The guy has a popularity rating below 40. Its about the same as the night of the election according to the polls he had that same popularity rating the night of the election when he won, like, 315 electoral votes. Well, but, you know most of those polls are plus 10 or 15 one of the surprises, joe, that i played around with was trump actually gaining seats in the house. Right but i rejected it because i do think the reaction of the American People is pretty negative towards him, and i think the election you dont think that the economy and the tax cuts eventually overcome that thats the offset to it, but i think the election will end up first of all, theyre going to be a lot of events between now and november right i there i that theyre going to work against i think a much better i think thats so mainstream in your thinking and so consensus that im hearing it from the democrats that theyre going to and the real surprise for you would be that the republicans pick up seats. That would be a byron wien type surprise and i place this is just consensus. This is mainstream consensus not taking the Senate Taking the house is consensus. I agree with that. Taking the senate is not consensus. Okay. Okay we look forward to seeing how these surprises turn out okay. Well, ill be here next year okay. Byron come back before then, byron. Your tenyear thing was i would have picked that too you know, that it would be 4 . To miss it is because of the global its like global now we cant move up as long as they dont move up on the continent i think, but they should be much higher by now. Well, and why should they be much higher . Because were almost below 4 its like none of the old correlations matter anymore but for inflation. Theres no inflation. But we dont know why theres no inflation because Everything Else is so much cheaper because of the internet. It masks things, doesnt it, and Technology Makes things so much cheaper. But if oil goes to 80 and other commodities rise, and we continue then there was fracking for oil, though. That paradigm changed the normal correlations with energy uses too, right okay. Well be at this desk next year, and well see how it turned out. Where is the tenyear at the end of next year well, at the end of 2018 . Yeah. It will be approaching 4 it will be. So you are going with that again . Youre going with that one again . Sticking with it. Byron wien, we hope to see you before next year okay. Im available any time you want. You got it. I think so that, byron. Thanks. Coming up, her ceos Steven Schwartz talks media deals and the changing landscape and the role tech will play in the industry in 2018 as we head to break, heres a look at european markets at this hour squawk box will be right bk. Ac welcome back hearst is out with the state of the Company Letter this week joining us with a look at the companys business and hearst role in the shifting media landscape is Steve Chwartz the president and ceo. Thanks for being here today. Thanks for having me. You have a lot of interesting things that are happening not only in your industry, but with your assets as well. Lets talk about some of them. Lets maybe start out with disney and everything thats happened its a big deal, and its going to matter this acquisition that they have in the twebt First Century fox because it impacts the television stations that you own, the abc stations, and it impacts a lot of your joint ventures tell us about what its going to mean we think that the fox transaction is a win for disney, is a win for fox, and clearly, a win for our businesses i think the assets that disney will get will strengthen espn, will strengthen the whole entertainment group, which would include our joint venture with them, with a e will definitely help the abc network and our stations we have 14 abc stations. I think it just is another great move by our partner, bob iger rsh. When did you hear about it . Did you hear about it the same time everybody else did. The same time the rest of us did. In terms of that going through, do you think its likely to happen does it matter if it doesnt yeah. Im not good at predicting these things, but i cant imagine that it wont go through. Lets talk about espn because that has been such a big part of the strength of disney for a long time and with your holdings too. Youve talked about how its a very important brand it has come in, and there are some tough times where do things stand right now . Theres no question that 2017 was a tough time really for most Consumer Media brands and certainly for espn, but i think that espn has a lot of momentum going into 2018. The disneys acquisition of a majority stake in bam tech from the Major League Baseball i think gives us a powerful platform were going to be rolling out espn plus. More games more other premium content to the super fan. Were excited about that you speak to the resignation of skipper running espn . Do you know anything about that beyond what weve read i dont know anything beyond what bob iger said, what john skipper said have nothing but the highest admiration for john and for what he did for espn and we wish him well most people inside and outside espn look at that situation of him his resignation and think that theres something amiss about it there was just a piece in the Hollywood Reporter yesterday about it it suggests the timing of it, certain comments that skipper had said even days before about being all in this together, about wanting to be there for years and years, and then all of a sudden this happening. Also, the statement itself said that he had this addiction for a long time. Did you know about that addiction . Clearly not look, you know, i think if you look at disney, bob iger, his long record, johns long record, you know, i think what they said is what actually happened. Steve, do you think that if i were if i owned espn, you know, i watched the georgiaoklahoma game. Sports is better than ever you know, its live, and you get to have live tv. Im so bullish on sports now, they cant always run games, obviously they got to have those talk shows. Do they have to be so i mean, theyre they get a little political, and its always from one side of things, and its irritating me in the past. Couldnt you just sorry about that. Couldnt you tweak espn a little so that it is a little bit not quite as, you know there are times when its, like, im changing this. Unfortunately, im not running espn no, i know. You know what im saying its easily fixable. Its easily fixable. I think theyre ino vating every day. I think theyve been trying not to add more politics, but to add more voice they havent succeeded. And, you know, sometimes with voice you get strong opinions. Just like here once in a while we have the other side you look at the at ttime warner transaction do you think that should go through . You know, i amle not a regulator, so ill let regulator, by the way, might come to a company like yours and say do you have an anticompetitive problem with this transaction do you well, look, we work with both sides. I dont have an opinion on it. Do you think that the disneyfox transaction could raise prices i mean, part of the strategy do you think that part of the strategy is to ultimately be able to rise prices on consumers . I think part of the strategy is be to able to put better programming on the air to unite, say, the fox studios with the great disney distribution, with the great disney brands. I think if you look at bob igers career, he has just been adding great brands and great talent to disney, and this is another attempt to add great talent to the disney portfolio what do you think happens to hulu in all of this given on tt and the ott product that espn will ultimately have i think hulu is a Strong Player in this distribution landscape. Does it become a separate is it a separate piece does the espn bamtech proposition or the disney proposition, are those separate . Do they become part of a larger the espn bam tech is an attempt to go directly to home with a specific espn branded product. What the exact strategy is of hulu, ill let bob explain that. The reason i ask is that you could also imagine the beginning of bundled ott services, right all of a sudden you could have an espn bundled service with a hulu or a Disney Service that would, therefore, impact your i think theres going to be a tremendous amount of rebundling, and i think its great for consumers whether its great for those of us in the business, well have to see. Okay. Want to thank you very much today. My pleasure coming up when we return, automakers set to release sales data for december. More importantly, what will they say about sales in 2018 . Our own phil lebeau will join us after the break. Then at the top of the hour congressman Joseph Crowley of new york will join us with his take on the tax bill and the affect it could have on the empire state squawk returns in a moment even love it. And today, you can do things you never could before. Youre working in millions of places at once with iot sensors. Analyzing social data on the cloud to create new designs. And using blockchain to help prevent fraud. So get back to it and do the best work of your life. Was it a december to remember for auto sales . Look who is here phil lebeau, happy new year, phil could have a preview of what automakers are going to say . So it was the biggest year globally ever, wasnt it globally it will be the biggest year ever. Here in the United States while it is down compared to 2016 and we get the final numbers for 2017, its still going to be one of the top five years ever with the sales rate above 17 million vehicles in the month of december heres what were expecting when the numbers come out within the next couple of hours. Dont get caught up too much in the fact that all of these automakers are reporting a decline in sales this is a yearoveryear comparison in december of 2016 was a huge year everybody is going to be down a little bit compared to december then truck and suv sales, thats going to be whats driving the sales in december, as it was for most of the year theyre up 6. 5 . This in a market that overall is going to be down anywhere from 2 to4 . The average transaction price, it continues to tick higher. This is according to edmunds. Com 36, 113. Thats what people are actually paying at the dealership for a new vehicle. It continues to go higher. Take a look at ford. When they report sales later on this morning, the fseries will be posting its best year since 2005 probably over 900,000 fseries sold in 2017 finally, take a look at this wall that shows you where we are in terms of annual auto sales. Now, were going to be down compared to 2016 not going to be at 17. 6 million. It will be over 17 million again, that will be one of the top five years ever in terms of total auto sales 17 is good. 17 is solid, phil. Remember, everybody is driving old cars thats got to have come down a little, hasnt it . Almost. We are still seeing the average age tick a little bit higher its over 11 years right now youre kidding. Were at the cusp where its going to start dropping. Phil, thanks. Coming up when we return, congressman Joseph Crowley of new york, he is gointoome g c and talk taxes with us squawk box returns in a moment nah. Not gonna happen. Thats it. Im calling kohler about their walkin bath. My name is ken. How may i help you . Hi, im calling about kohlers walkin bath. Excellent happy to help. Huh . Hold one moment please. [ finger snaps ] hmm. The kohler walkin bath features an extrawide opening and a low stepin at three inches, which is 25 to 60 lower than some leading competitors. The bath fills and drains quickly, while the heated seat soothes your back, neck and shoulders. Kohler is an expert in bathing, so you can count on a deep soaking experience. Are you seeing this . The kohler walkin bath comes with fully adjustable hydrotherapy jets and our exclusive bubblemassage. Everything is installed in as little as a day by a kohlercertified installer. And its made by kohler americas leading plumbing brand. We need this bath. Yes. Yes you do. A kohler walkin bath provides independence with peace of mind. Call for a free kohler nightlight toilet seat with consultation. Or visit kohlerwalkinbath. Com for more info. The final hour of squawk box begins right now. Life from the most powerful city in the world, new york, this is squawk box. Good morning welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernan, along with becky quick and Andrew Ross Sorkin the futures had been positive on early on a little bit, and now at least for the dow and the s p. Actually, now the dow has turned positive the nasdaq was very strong yesterday. You know, the dow went up 5,000 points when the nasdaq goes up 1,000 points, since it was only at 6,000, its a much bigger deal it was i any eight months it took for the nasdaq to go from 6,000 to 7,000 i can remember thinking we would never see 5,000. Again after the crash. Because our building out in inglewood cliffs, we brought up the nasdaq 5,000 building. It was built in we spent a lot of money beautiful building then it went from 5,000 and it took a few years to get back to 5,000. Now 7,000. Take a look at europe. Europe was going a little bit better earlier well see. A little bit half of a percentage point gain in germany and france. Then treasury yields were closing in again on the 2. 5 level. Well see whether this is the year 2. 44 were at 2. 46 earlier. Well see if this is the year that we faebl get a three handle again. If it didnt get to three, either way we waited for it for so long. Its a small margin at that point. 2. 5 to 3 we havent hit it in how long ten years it depends on what every other what is it you know, you have economies that arent nearly as strong as us with much lower rates. Zero. Right. News this morning as well that we should tell you about. Dominion energy is buying southern Utility Company scanna for 55. 35 a share in an all stock transaction. That deal is valued at about 7. 9 billion the offer represents a premium of 42. 4 to scannas kroezing price yesterday. As a result, scanna shares at this point up by 22 north korea reopening communication with south korea that had been closed since last february this move comes a day after south korea proposed high level discussions and just hours after President Trump tweeted this north Korean Leader kim jong un just stated that the Nuclear Button is on his desk at all times. Will someone from his depleted and foodstarved nation please inform him that itoo have a nuclear but heon, but it is bigger and more powerful than his, and my button works in a statement twitter said that President Trumps tweet does not violate the terms of its service. All right. Officials in south korea said that they conducted a conversation with the north that lasted about 20 minutes, but it didnt disclose any of the contents of that call. Alibaba affiliate ant financial. Ant Financial Services will no longer buy Payment Services Company Money grab that follows objections by regulators the 1. 2 billion deal didnt get approval on Foreign Investment in the u. S. Which reviews acquisitions by foreign entities and responds to the question about the rejected deal. Chinas Foreign Ministry Spokesman Says he hopes the United States can create a level Playing Field on a predictable environment for chinese enterprises. Thats kind of cute, since it . I dont know how competitive and fair it is when the u. S. Goes over there either. Ant financial congressman is the biggest one, and its called ant. That doesnt seem does that seem it doesnt translate thats what i have decided should be preying mantis. Spoken like a true Elizabeth Warren democrat. Joseph where. Is that now a pajorative i like to be called a joe crowley democrat shes a joe crowley democrat. I admire her work we will properly introduce mr. Crowley in just a moment two companies to celebrate in the gop tax plan southwest and American Airlines both announcing theyre going to give 1,000 bonuses to employees following the tax overhaul that President Trump signed into law mast month they also said theyre going to be using the tax savings to buy new planes they said they will reward shareholders and increase its fleet investment with longtime partner boeing to support future Growth Opportunities the two Major Airlines are just the latest businesses to announce bonuses and pay hikes along with others, including cnbcs Parent Company comcast, wells fargo, and Fifth Third Banks. Talking about all this, democrats thinking of ways to blunt the impact of republican tax plan in high tax states like california, new york, and new jersey to naem a few joining us right now is the gentleman to my right. We didnt properly introduce him before, but here he is new York Democratic congressman joe crowley. I want to talk about three things before we even hit the tax front. First, you saw this north korea tweet and you thought what par for the course. Its not ending. I was here a year ago in january, and i made reference to the president acting like a childlike behavior. This is adolescent at best i think. I think the American People are exhausted. I think its is it normalized . Thats what i mean. To the point the people are tired. Twitter does have a policy. No bullying. No threatening to murder people. I mean, doesnt this constitute somethi something in that vein have to say that donald trump is doing it, first of all, so you really cant believe everything he is saying anyway. Im happy for the workers that are getting it. At t also said theyre going to give 1,000 bonus to their workers and lay off 1,000 people as well. Completely out of whack meaning the number of people who are actually going to be getting im happy for those workers and the thousand, by the way, was a legacy business that was going out of business anyway let me say, though, i think im happy for the people that are getting the 1,000 bonus its one year. We waste an opportunity here to invest in america we had what we had is the refinancing of the house of america. Theyve taken out of the house 1. 5 trillion plus interest, and instead of investing in College Tuition for the kids or putting a new from the infrastructure from the house, they gave that wealth to the wealthiest multinational corporations in the history of the world thats what happens. By channel, joe, he would say that the democrats depleted the coughers of the United States over two unpa i had for wars and expansion of Medicare Part d that was during the Bush Administration weve had Economic Growth for 80 plus, almost the 0 months now. President obama has continued during the first year. State and local taxes whats the state of new york going to do . It remains to be seen people will be looking at this and trying to figure out is there a way in which we can create an entity that can help 501 c 3s so all taxpayers are effecttively donating into it. A charitable contribution do you think the irs will go into it. If you dont have a majority to do that, i will say that this is the biggest bait and switch in the history of the country. The president went out and campaigned and said he was going to help middle class america and instead, you know, corporations dont vote people vote. They have been left behind in this bill. The tax cuts for corporations are permanent. Not so for the individuals they dont say how theyre going to pay for it, but there was a big bait and switch, and the American People know it and see it theyll react to it this november it the next conversation about entitlements or infrastructure theyve always been about entitlements i think paul ryan, the chatter in washington this is no discussion really about talking about actual infrastructure bill that would really invest in america. Theres a lot of chatter about going after welfare, going after Social Security, going after medicare and medicaid. Thats been paul ryans dream. He said he is not leaving. Do you think it hans before 2018 i dont think its going to happen at all. Well fight back in an effort to diminish Social Security and medicare and medicaid. Okay. Well leave the conversation there. Unless either come on, joe. Come on. There are big differences between the way the republicans and democrats approach an economy, and i dont see wealthy profitable corporations as something to hold up as, you know, if its somehow exclusive to a good can economy. Its the only way i dont even think corporations believe they were going to get below 25 in a tax cut. They went from 35 to 21. If corporations are able to compete better globally then they hire more the wealth it accrues to this nation is from the corporations. Not from government. When the government allows the private sector to keep more of its own money, i dont see that as a giveaway thats not stealing from the government there was bipartisan support for reduction of corporate taxes. We understood. But in your view, then why couldnt that come under the same criticism that you just gave you still would be rewarding the biggest multinational richest companies. Why reward them at all in this case to the exclusion of the average american. The average american. We did this in the tax cut too. Maybe its not permanent, but you can make it on a permanent basis. They should with done this. We have a chance. Thats not the away i it works. Did has to be paid for we did this on the back for reconciliation. We gave the wealthiest in this country the corporations. And people and individuals. Millionaires are looking at 34,000 plus in new york theyre not with a smirk and a smile. At the end of the day, yeah, this is painful to a state like new york, like california, new jersey you know how is that good for us . How is that good for america in a year if you come back and we get consistent 3 plus go growth i hope we do. It wont be due to this it will be the obama economy youll tell me it was the obama economy at that point. I would never bet against america. You are treading close to that not at all. Not at all i there think theres more bipart zblabship potential than this president will ever realize. I havent seen it. Lets begin. Yes or no . Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Prices slipping this morning. Joining us now is matt smith, director of Commodity Research at cooper data lets not talk about what happened just in the last couple of days. Lets talk about 2018. Byron says 80 oil, it was a big surprise when oil started heading up in the latter half of 2017. For everyone that is long is long, and all that can be done now is really that it can be sold the bullish influence is that were in a situation now, joe, that we havent been in for a kwchl years and that the market is more finely balanced. Its going to be from geopolitical tension predominantly from iran and venezuela as well, and so, yes, we could see a bearish influence coming through from u. S. Production growth, and really we have to look at that geopolitical tension simply because the market is more finely balanced now. What do you think will happen in iran longterm and thats got to play into this in some respect at some point, doesnt it absolutely, joe its a real concern from our percent pictures iran hasnt increased production since sanctions were lifted early last year. Theyve essentially shot themselves in the foot because they havent wanted to have International Investment or havent really encouraged it now that theyre having unrest coming through, there is the concern that if that escalates, it could impact production directly indirectly or directly, iranian production could be impacted, and that would have an impact on the global balance it will be a bullish influence for prices that is a real concern we hear all the positive sentiment associated with equity markets due to the global synchronized growth. Whether does that become demand . When do we rachet up demand and see higher prices based on that and then stop talking about supply or at least supply becomes less of the wild card and it becomes about demand again . Well, joe, it is it has come become about demand in recent months. Were seeing demand. Its really going to help, and it is helping balance the market its wrapped up in recent its obviously oecbm that has been a progress, and that is still ongoing. The combination of strong bemanned growth and the inventories being drawn down has balanced the market, and thats why were now at 60 on wti and back in the mid 40s where we were last year thanks. Thanks. Coming to us from louisville. You said it correctly does all right, folks when we come back, real estate bust the market in manhattan just had its worst quarter in years we will tell you whats worrying the real estate brokeers right the real estate brokeers right after this break help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Welcome back to squawk box. Can be manhattans real estate had its worst quarter in years there are worrying signs especially at the top of the market robert frank joins us. This is like a contrarian take i read another story that said that somehow everything was fine i dont see how you would see that in the numbers, and it was expected to be an okay quarter not great because people were kind of waiting on the taxes, but it was surprisingly weak with a lot of big drops. Lets take a look at these took a big fumble. Experts take 2018 could get even worse. Especially at that very, very top end of the most expensive new condos Fourth Quarter was the worst in six years for sales. Down 12 average prices fell below two million for the first time in two years. Almost affordable there. Now, brokers say it was a oneoff as buyers waited for clarification on the tax plan. The problem is that those details are bad for manhattan and real estate because of the elimination of state and local Tax Deduction says is expected to put pressure on those prices. The high end, especially, was hit hard sales prices on the luxury end, thats the top 10 of the market. Vince p viola bought it for 20 million. Obviously, the long story of mapt may not real estate is over time it is a very good investment, but right now weve got more than 5,000 new apartments coming on the market in the next two years at a time when 5,000 5,000 at a time when salt deductions will put pressure. Its not just the salt deductions that are weighing in. Its the inventory that is 17 months now and about to get a lot bigger thats going to be the challenge for prices robert frank, thank you thank you, guides i appreciate it all right coming up, cnbc is on a mission to visit all 200 cities that submitted bids for amazons hq2. Scott cohen, let me guess, where are you this morning with this music . Yeah. What could it possibly be . Becky, you know, amazon has said that it wants to replicate seattle for its second headquarters, and this is a city with mountains in the skyline. Its got lots of tech workers, and its got legalized pot is this the site of hq2 . Well take a look at how this city stacks up and telyou l where i am if you havent figured it out, when we come back sicas house . Uuughhh this is what our version of Financial Planning looks like. Tomorrow is important, but so is making the most of the house before theyre out of the house. Spend you life living. Find an advisor at northwesternmutual. Com. Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost. So all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Im becky quick along with joe kernan and Andrew Ross Sorkin, and among the stories front and center this morning, some bullish sentiment has decreased, actually, to 61. 9 from 64. 1 thats according to the latest u. S. Investors intelligence poll the survey finds that nearly 23 of people now expect a Market Correction amazon says that its shipped more than 5 billion items worldwide through prime service last year. The ecommerce giant reports that Fire Tv Stick and Voice Assistant echo dot were the best sellers. Vice media has spbded its president and its chief digital senior as it investigates allegations against those two people that follows a New York Times report on Sexual Misconduct at the media company. That report said vice had settled at least four incidents involving allegations of Sexual Harassment or defamation the times spoke to two dozen women who say she experienced or vice medias founders have apoldsed for what they call the boys club culture. As we reflected over the course of the last several months weve done a fair amount of work to establish what they think is the value and we think that the value is in excess of 1 million weve tried to balance the concerns about accessibility that patients families and Health Care Professionals have voiced the concerns about a budget impact that weve heard from payers as well as the need for us to build and create a path for a Sustainable Business model. So is million is really what wall street was expecting or even more than that. 850,000 really coming in slightly short of those expectations the company also outlayed three sort of interesting payment potential models for this drug, including tying rebates or discounts on the drugs to how well the drug works, both shortterm and over 30 months. The company is also introducing sort of a new contracting model. Avoiding the risk for hospitals to have to buy the drug up front since it is so expensive finally, tlooef also proposed to the centers for medicare and Medicaid Services a way to potentially allow payers to pay in installments for this, which is a really new idea all of that kind of unfolding, but an interesting day the first gene therapy in the United States getting a price of 850,000 guys, back to you. Okay, meg thanks very much by the way, this is the year that amazon plans to announce the location for its 5 billion hq2 project. The company has not said when it will make that announcement. In fact, it hasnt said much at all since it launched the competition last fall. More than 200 cities have submitted bids for the new headquarters, and scott cohen is busy trying to visit as many as possible before amazon actually makes his choice today he is a mile high in denver, and scott, its great to see you. Good to see you, becky. Happy new year you know, denver got top of to a fast start in the amazon race back in september before anybody submitted a bid. When the New York Times confidently declared dear amazon, we picked your new headquarters for you denver it is, the paper said citing the citys lifestyle and affordable, coupled with the supply of tech talent from nearby universities. That settles it, or does it . Colorado does have the most educated work force in the country, according to the Census Bureau the states economy is pretty solid. Taxes are competitive. 70 of the states roads are in poor or mediocre condition with a bit of a grain of salt remember, now, our report card looks at amazons four main criteria as measured by our americas top states for business data and data from the Census Bureau. Heres how denver does in our book now, remember, amazon has looked for a metro area with a million plus in population denver has almost three times that, so thats an easy aplus it is a business friendly state. The economy has cooled a bit they have a big pension problem in the state were giving the state a bminus for stability. We have a b minus for talent heres where crumbling roads and those minimum state incentivists bring in they bring it down to an f for location you put it all together, and overall gpa of cplus for denver not so mile high after all now, we have record report cards for some two dozen cities at cnbc. Com, and later today on power lunch, we will talk to colorados governor john hickenhooper, also former mayor of denver, about what he thinks the chances are. That is coming up on power lunch 1 00 eastern time today guys hey, scott, i know you have been traveling all over the place. Weve loved all the reports youve taken from these cities of all the cities that youve been to so far, which has scored the ighest the city thats probably scored the highest, lets see, while we were in North Carolina in the last year, it was, yeah, chicago is in some ways a sentimental favorite my hometown. That would be fun. They have a lot of issues with state finances and that whole stability thing, and also, just work force issues in the state of illinois. The state thats done well so far and a lot of these cities that have done so well so far, i should say, are in the south you are thinking about raleigh and charlotte and atlanta. Places like that all places that will continue to look at until whenever amazon witles down this list. They said this tlk this year, but they havent said many this is like the continuation of the top states. We get to do it all over again right scott, thank you. Well see you again soon folks, when we come back, unrest in iran. The Supreme Leader blaming days of protest on meddling by enemies of the country we will talk to iran policy analyst right after this break pass please. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. Welcome back take a look at where the futures are now at 8 39. Weve been watching them all morning long back positive now on the dow up about five. Now the nasdaq is actually turning negative less than a point. We have to wait, i think, for the trading session to see how things play out today. When we return, were going to talk iran policy with analyst karim about unrest in iran ene turn you have a little bit of both the Semiconductor Industry analyst group, which says the association look, november was a huge month well, that means that apple must have had a big plo youve got the fang, you know, add in amazon. Amazon today comes out and says more, better, fabulous theres no refuting it i know you guys went over this netflix is talking about how theyre going to have you know, their new stuff is doing incredibly well. Nothing from facebook yet. Im waiting for them theyve been real quiet. We were talking about 2018, obviously, now, and byron we do close above 3,000 on the s p after it was all said and done i dont know theres you can never see in advance of that because when you are down 10 , you think youre going down 20 or 30. Really its hard to buy isnt it hard to buy hit 10 , ask then you buy where, when youre at 10 , you think something changed, and i dont know markets that are headed up dont give you 10 chance to buy its obvious people run for the hills. Thats where they get stopped out. I love byron i think he going to be right i think his s p target will be right. I have followed his surprises. I dont know, for 30 years the ones that are wrong, dont really hurt you. The ones that are right are fabulous thats that kind of riskreward that makes byron so special. You wouldnt be surprised if we do see 10 . A lot of times it doesnt give you that chance. If it did give you the chance, you dont know that you have want chance because you are worried about losing 30 . Autoit depends whether it was a good year or not i think it was there were too many negative people i mean, listen p what Steve Schwartz said when he said that, look, its not about spn its now about all these different sports programs. You know, hearst has a much better call than anybody else. He didnt know ahead, but the fact is hearst has the numbers, and if hearst if steve sh barts comes on and says that espn is not a factor, man, he has the numbers this morning i like that. Excellent point, jim. Excellent point. He has the numbers. Nobody has the numbers like steve. Thats why it was such a great guest to see all right, jim. Thanks well see you in 15 minutes. Gotcha. Folks, President Trump just tweeting about iran. Such respect for the people of iran as they try to take back their corrupt government you will see great support from the United States at the appropriate time you might take something for your heart. Or joints. But do you take something for your brain. With an ingredient originally found in jellyfish, prevagen is the number one selling brainhealth supplement in drug stores nationwide. Prevagen. The name to remember. nadia white the moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. dane chauvel sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. tom villa we took our world class network, and we developed devices to track environmental conditions. This device allows people to understand whats happening with the location, but also if its too hot, if its too cold, if its been dropped. Its completely unique. dennis woloshuck if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Who knew a tiny sensor could help keep the food chain safe . Welcome back, everybody. Antideposit protests continued in iran overnight, but today Iranian State television aired footage of progovernment demonstrations in cities across the country. The rallies come after irans Supreme Leader ayatollah blamed protests on meddling by the countrys enemies. Joining us is karim, senior fellow with the carnigy end endowment for international peace. Thank you for being with us today. Thank you lets start with the root cause behind the original protest. What happened . What sparked this . Whats the real reasoning . Well, i think the overwhelming frustration of almost all iranians is economic. Rising living costs, unemployment then you couple that with corruption, mismanagement, fraud. Then on top of that iran is a theocratic regime. Its not just politically and economically repressive, but also socially repressive i think that the root causes are more economic than anything else, but there are a lot of reasons for iranians to be frustrated weve been talking about the economic problems sf all of the frustrations that iranians have been dealing with over the last couple of days here on the program. When you look at it, we kind of had the expectation that with the changes that happened with the lifting of the economic sanctions that things would get better that hasnt been the case . It really hasnt been the case, becky. There is one theory of popular movements that they oftentimes happen when peoples expectations have been raised and then dashed. Thats dashed. Thats what happened with the nuclear deal people had expectations that the quality of life would improve and it really hasnt one of the problems in iran, you have an ideal logical regime in charge led by by the Supreme Court Supreme Leader. A very simple litmus test for that is if youre trying to pursue the economic interest of your people, the official slogan of death to america doesnt make any sense because you would want to have commercial relations with the most powerful economy in the world so i think the challenge as Henry Kissinger put it very well, is iran a nation or a cause . And i think that the iranian people want iran to be a nation which follows its National Interests but i think the top leadership in iran still see themselves as revolutionary cause. We have seen these protests shut down rather violently and quickly in the past. What do you think happens this time i also think these protesters face daunting obstacles. Whats interesting, i was looking at the map of the protest last night and almost the entirety of western iran is in a state of kind of minor insur recollection i think whats challenging for the regime, they are accustomed to putting out large protests in the city of tehran when you have dozens of smaller fires in smaller cities throughout iran, thats somewhat more difficult, especially at a time when the Iranian Security forces for last five years had been focused on putting out fires in places like syria and iraq and supporting Houthi Rebels in yemen. Their attention has been focused elsewhere. If they are stretched thin, what do you think happens next i still think this is a regime we should not underestimate the resolve to want to stay in power. I think they still have cohesiveness, the Security Forces and have a lot of resources and i still think that its going to be very difficult for antigovernment protests and iran to succeed. We can salute the courage of these folks and wish them well but i think we have to be sober about the prospects . What should or could america do the u. S. Has somewhat limited leverage over iran i know theres always been a debate about what president s should or shouldnt say. Its only natural that when you have protests, antigovernment protests against a regime who is so opposed to the United States any american politician is going to want to support that, i think whats more important is what we do and i think one thing we can do is everything in you dont pourer pouwe to inhibit the ability to repress and sensor one of the ways to do that, make it clear to companies and countries around the world, if they are plkplis it, providing h means or technology to black out, they will be sanctioned by the u. S. Government. What should we be doing through the u. N. In terms of other threats . Are there other things you think we should do we can continue to try to mobilize governments and partners around the world. International Public Opinion countries no do have better relations with iran, were talking about European Unions and south korea and japan, to have those governments make clear to the iranian government, listen, were not going to continue our commercial relations, our trade deals if you guys are you know, killing dozens hundreds, potentially thousands of your own people. Have we been effective in terms of how we pushed for that in the past . You look at the number of Foreign Companies that immediately went into iran and set up business there as soon as sanctions were lifted. A lot of people thought we had kind of given up our power at that point what do you think . Becky, i actually think there was a lot of Companies Interested in iran, one ceo, european ceo told me we had a lot of big conversations but not a lot of big deals were signed the combination of the fact that iran is looking unstable to people, theres a potential for further deterioration of u. S. iran relations further u. S. Sanctions and then just the realities of the iranian economy, theres no transparency enormous crony capitalism, this isnt necessarily an attractive place for investors or others to put the money, sure, countries will want to buy irans oil and gas. But other than that, theres still its still a country frout with real risk. We have talked for a long time how the leaders in iran have not been friends with the United States and how the 70 Million People living there were very much if not pro u. S. , at least open to buying products from here, at least open to having some sort of relationship what do you think the feeling among iranian the iranian population is today . Well, theres a couple of paradoxs about iran and i think you put your finger on one of them which is that its perhaps not the only the most antiamerican government in the middle east but one of the most antiamerican governments in the world. Official slogan is death to america. But as you said, the population is favorably disposed towards the United States. Thats not to say they love all u. S. Policies but overwhelming majorities recognize their quality of life would be better if they had relations with the United States and they were integrated into the global economy. As i say they want to be south korea, not north korea thank you very much for joining us we appreciate your time. Thank you a little bit of news for you. Warren buffett has now officially won a 1 million bet and donated the winnings to charity. Back in seve2007, a decade ago e bet a million that a s p 500 index fund would outperform a basket of hedge funds over a decade it returned 7. 1 , versus the 2. 2 return of the hedge funds picked by prot toe jay partners. And they are now worth more than 2 million and buffett is donating the money to the local affiliates of girl s inc. , to inspire all girls to be smart and strong and bold. We expected thd. The writing has been on the wall for a while. Its true very true. The guy doesnt lose he never loses amazon wants to get deeper into the fashion industry and in a very high tech way tech giant patented a mirror that would dress you what . The imagined mirror lets you try on clothes virtually while placing you in a virtual location amazon has launched its own clothing line to develop algorithms based on instagram fashion trends they sold a product last year that looked at you and would tell you what youre wearing and take pictures and critique you someone on recently in the last couple of weeks that has algorithms for picking out you remember amazon, i believe they have they already have a product that will take a picture of you from all angles lands end did Something Like this back in the 1990s they had a thing they brought out and would measure your whole body and dress you in it to buy online when people werent buying things online it messed up the al go reasonabrhythm i made everybodys hips really big. Its called the eco look. Its a real product echo look, style assistant with alexa it includes a style check to get a Second Opinion alexa, does this make my butt look big thats the question not you but others may ask 199. 99 and its available with prime membership. We need to try this out. Not necessary ive had this for years, gar garanimals. Hip poes with hip poes and tigers with tigers. A cold front a cold front is coming. Bearing down on the east coast. They are calling it a polar bomb thats the phrase. Hasnt been cold enough recently its going to get even colder, dealt at a is preparing for delays and cancellations issuing a travel warning for today and tomorrow in the midatlantic if youre flying out of any of these affected airports, you can change your flight by january 7th without a fee or you can cancel it all together in exchange for a voucher for the unused value of your original ticket and that can be put towards another trip within a year i saw 1 to 3 inches here on wednesday and thursday and the chances of above three are east and south of here its worse. I dont see the foot. People arent talking about a foot. Please not, its going to be hard to get here tomorrow. It could be a big noreaster and big winds. It is january. Getting us ready for daf voes. Im going ton vacation on saturday hope it blows off quickly so the planes can take off. Are you going to have a relaxing vacation . Im hoping to. Stay off of twitter. Ill have to stay off of twitter. Dont look at what stay off instagram. He might insult kim jongun again, mean to the guy who his people are starving and puts people to death, but we dont want to insult him. As you know on vacation i wake up at 6 00 a. M. Every morning to watch squawk box squt. Thats not true i do hear about it dont go on twitter, trump will be tweeting and i dont want you triggered. Enjoy yourself. The snowflake is about to melt. Make sure you join us tomorrow, squawk on the street is next. Good wednesday morning, im Carl Quintanilla with jim cramer faber is off today the nasdaq crosses 7 k, the first trading day of the year since 2013 and a lot to watch including auto sales and slew of upgrades europe is green, oil right around the