Transcripts For CNBC Squawk Alley 20161213

Welcome to squawk alley for a tuesday morning. With john forte and Kayla Tausche this morning, dow, s p and nasdaq all trading in record territory, dow inching closer to 20,000. Starting to ask questions about whether it will bring about some selling. Looking for about a twoweek pull back in the wake of a fed meeting. Well see. The rest of the week will be interesting. For sure. Best s p factor today, dragging behind the rest of the postelection rally. Interesting to see it join the bunch today. Nasdaq hitting a new record early this morning. Nfib Small Business confidence soaring after the election, which a lot of investors are parsing through today. Bill gates seems to think that stocks are a little expensive. He knows a thing or two about finance. Going to get more from him in this show. He spoke to our becky quick earlier this morning. Nike, of course, the dows biggest laggard of the year is today the Top Performing dow component. Well see how long that dynamic lasts. Meanwhile, new cabinet appointment for team trump, giving the nod to exxonmobils Rex Tillerson for secretary of state. John harwood is downtown with details. Reporter you mentioned bill gates. He not only sat down with becky quick but will be sitting down with president elect donald trump later this afternoon in advance of the summit, a group of executives who did not support donald trump by and large during the campaign. That will be something to watch tomorrow. As of today, continued motion toward filling out that cabinet for donald trump. We havent gotten an official announcement on rick perry, former governor of texas, as the secretary of energy, department that he proposed abolishing in his own president ial campaign. We expect that very soon. We have gotten official word on Rex Tillerson, chief executive of exxonmobil, one of the most powerful corporations in the world, donald trump hailing him as world class deal maker, with global experience. This will be a tough confirmation fight. Significant number of republicans have expressed some concerns about his ties to russia along with Donald Trumps ties to russia and policy statements. But we do have a statement that was just put out a few minutes ago from Mitch Mcconnell, saying he thought Rex Tillerson would put the nations interests first and looks forward to supporting him. Statements of support from former Vice President cheney, former secretary of state condi rice former george w. Bush National Security adviser steve hadley. Well see how those two sides line up. When you step back for a minute and look at the overall cabinet thats filling out, you can see two distinct things. Donald trump likes generals, general mattis and he likes corporate executive. No surprise there. Rex tillerson, andy puzder. Gary cohn will be head of his National Economic council. The question is how do trump voters react to those kinds of choices . In the end, guys, theyll be judged by the results they deliver and well be watching. Certainly generals and Business Leaders reflect both trumps youth and working experience as an adult. John, thanks a lot. With key cabinet posts filling, the focus now shifts to the economic and policy agenda. President elect set to meet with tim cook, sheryl sandberg, jeff bezos and others. Bill gates joining squawk this morning. Listen to what he told our becky quick about expectations from the trump team. I think theres a lot of fascination to see what the new directions will be. Donald trump was elected not so much for specific policies, but because the kind of leadership those voters wanted. So, he has a lot of flexibility on which issues he really goes after. And so thats why i think a dialogue now, you know, what are the positive things for america that hes thinking and who can help out with that . For more on the trump economic and business agenda, were joined from washington by the president and former bane capital Founding Partner and author of the New York Times best seller the upside of inequality. Good to talk to you both. We talked several times about whether or not a 4 number on our economy is doable. Do these appointments feed your faith that it is . I do believe theres a way you can do it. Im not sure these im satisfied with these appointments in the sense that theyre very pragmatic and not driven by wishful thinking. Highskill workers, 100 million fulltime workers, the top 5 , 5 million, issuing green cards a year. In a very short time a year, you could double the number of ultra highskill workers. On the issue of lowskilled imgray i hate seeing them throw out the baby with the bath water instead of shifting toward highskilled immigration, which is growing the economy today. Tax reform is a priority for the administration, piecemeal or comprehensive. We heard from trumps advisers that maybe a longer term refinancing of the u. S. Debt would be attractive. You know more about the debt than almost anybody. Does that work . For starters i certainly share the objective that we would like to see the economy grow as much as possible. I also want to caution without changes to the labor market, because so many people are moving toward retirement, that becomes more challenging. Think about things like highskilled immigration. Does have a real upside. But i still want us to be reasonable about our growth assumptions and tax reform, one of the critical ways to get there, if we reform our tax code that leaves us not competitive in so many ways. However if we go forth and do it in the ways that some of the Campaign Proposals would have done, which is to add 5 trillion or more to the national debt, already at nearrecord levels, that would be problematic. Do i think refinancing the debt is a good idea . If it were, treasury probably would have already been doing it. Rates will be coming up again soon. I bet thats not as big a topic. We should be focusing on fiscal controls and growing the economy. What is your reasonable growth assumption for the next few years . Right. Projections are that the economy is going to be growing around 2 . Obviously we want it to be higher than that. We are con strained by the real demographic shifts happening in this krichlt just to get to 3. 5 growth would take productivity gains that are unprecedented. We want to look at tax reform, regulatory reform, more public investments instead of consumption. We want to look at getting our debt under control. We want to shoot for increasing growth by half a percentage point is probably more likely than a full percentage point. Right. If theres more on the outside, thats great but lets not count on t we have to be cautious on what we build into our estimates and reasonable. And highskilled immigration, i know thats something thats going to be top of mind for the tech executives meeting with president elect tomorrow. Though they probably wont get that deep into it. How do you, if youre in Donald Trumps position, actually deliver on increasing highskilled immigration when you were railing against h1b policy . Do you have to fold in around Something Like manufacturing where the rust belts mind is these days . You can satisfy the rust belt by reducing lowskilled immigration. Workers feel that lowskilled immigration puts pressure on their wages. We are issuing about a million green cards a year in president obamas administration. We issued about 10 million green cards to lowskilled workers. If we were simply shifting that to ultra highskilled workers, 5 is 350 million. Half of them, we dont know who they are. Half of that is too young, too old. Half of those will never move. You get down to a pool of about 50 million people. If we could go out and get 5 million of those 50 million, it could have a big impact on growth. Cutting marginal tax rates will affect growth slowly over time through increased risk taking. Thats a long, slow, gradual road. I think this is our only real opportunity. I think it would be a shame that if in our fight we took our eye off the ball. Squandered opportunity. Maya, the market, obviously, stocks want to focus on deregulation, tax reform and repar repatriation. Do you see those as potential headwinds that could offset what is going right or what we think will go right . Sure. So much uncertainty right now both economically and politically. Markets are optimistic, as youre watching the market approach 20,000. Im watching the debt approaching 20 trillion. Theres lots of things that are out there, making us all nervous. But theres more uncertainty, really, in terms of what policies are going to be pursued and how they are going to interact with the overall growth strategy. We felt in the long time. Many of president elect trumps policies, and many like tariffs, could be antigrowth. We dont know which priorities will win out. Im looking for a comprehensive growth strategy. Something thats not like a sugar high with lots of shortterm stimulus, which i dont think were at the right moment in the Business Cycle to be focusing on but a longerterm plan that looks to these structure changes, taxes, regulation, how we spend our money and how we boro, how we could borrow less. Those have sustainability. Thats a good reminder. Pay attention to dow 20k, we should probably watch the debt at 20t as well. Thank you very much. Thank you. The dow inching closer to 20,000. Hey, bob. Weve fallen back a little bit, carl, at 19,9. Marching toward 20,000. The kiwi keep marching toward is rotation. See this in the dow today, stocks that are pushing the dow up. Remember, apple was a laggard in november. Many of the big tech names didnt contribute to the rally. Nike and consumer staples, discretionary stocks were not contributing nearly as much. Were seeing these kind of sectors come forward today. If you look at the sectors themselves that were leadership groups, its the same story. We didnt have Consumer Discretionary as strong in november. We didnt have utilities at all moving. Utilities went in the other direction. They were negative. Consumer staples generally were down in november. Every day you get these consumer staple names. Leadership this month, again, telecom, real estate, consumer staples. Thats the rotation were talking about. Thank you very much, bob. When we come back, red flags for rex. Why trumps pick for secretary of state is expected to face some resistance on capitol hill. Just in time for the holidays, Stocking Stuffer consumers have been waiting for. The dow gets closer to 20k, the day before the fed is expected to pull the trigger on another hike. What bill gates has to say about equity markets when squawk comes back. Want in industrial strengthgs t like cologne. Morning but theres one thing you do. gags its called predix from ge. The cloudbased Development Platform thats industrialstrength strength the wait is ending for some apple users around the world, leasing their air pods. Josh lipton has the details. With air pods you remember apple saying it is reinventing the wireless ear phone. Air pods are an important accessory for that new iphone 7, which does not have a traditional headphone jack. Reviews were strong with the tech press saying these are the simplest bluetooth headphones out there. Thats why they were surprise and some disappointment when apple delayed the original october launch for these ear buds, unusual misstep for tim cooks company, which never did explain the reasons for that delay exactly. September the air pods were introduced. Apples Phil Schiller did talk about the hardware. It is a break through design. Air pods deliver truly an apple magical experience. When you try it, youre just going to be blown away. So how do they work . Open up the charging case on your iphone with a tap. Air pods are immediately set up. They deliver up to five hours of listening time on one charge. Apple said it needed more time to get that product ready for consumers. They are going to be available to order now. Theyre going to cost you 159. Apple is not saying how many units are going to be available on the companys website right now it says air pods will ship in four weeks. Back to you. It doesnt sound like the problem is completely solved because apple talks about these shipping in limited quantities. Also were still waiting on the beats x ear buds that are supposed to work with their w1 chip as well, make it pair more easily through bluetooth. The beats solos and power beats 3s are already out. Some have problems, some dont . Yeah. Its not clear, john. Remember, air pods, as you know, we are not clear as to what exactly caused that initial delay. There was a lot of speculation about different reasons. Apple in a statement to cnbc at the time only said the product wasnt where it need to be for consumers. They are available now. To your point exactly how many are available, we dont know. Apple is only saying limited quantities. I read about some estimates that are out there. I know financial analysts are trying to gauge it. I read some estimates being 15 Million Units at launch at least initially. Still some questions about how much are going to be out there. Ships in four weeks so no air pods for you under that christmas tree. Already having missed black friday and cyber monday. Josh, im wondering if there has been any conclusion from the Analyst Community about whether this has impacted iphone 7 sales or not. Yeah, that was a big question, kayla. Obviously, that this device is so key and critical to the iphone 7 after you did remove that headphone jack. I know that was a question investors had. Was that going to impact somehow sales of the new phones . I, at least, havent seen any research indicating thats the case. Stock had a rough few days following the election bounced right off the 2 hyundaun 200 da they are expected to show up in stores next week. You cant order them online but those who want to go into the stores may be able to snag them. Bated breath. Up next ambassador Nicholas Burns will give his thoughts on president elect trumps pick for secretary of state and more. Dow earlier crossing 19,900 for the first time in history, inching closer to that 20,000 mark. The trump rally still in full swing. More squawk alley coming up next. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley dow up 81 off the highs, but still on track for its best quarter since and best quarter ever. Were back after a short break. There are many things you dont want in industrial strength smash like an administrative assistant. Your 3 oclock is here. But theres one thing you do. Its called predix from ge. The cloudbased Development Platform thats industrialstrength strength hello, everybody. I am sue herera. Syrian Television Broadcasting footage, which showed the vast destruction of aleppo as Government Forces are expected to take the last rebel holdout. It would be president assads biggest victory in the civil war. Bill cosby back in the courtroom for his Sexual Assault case. He smiled, nodded, wave aid little bit as he arrived at the courthouse. His attorneys are trying to limit the number of other accusers that can testify at his trial. Cuisnart is recalling food processors, blades can crack over time, causing small metal pieces to break off into food. There have been 69 reports of those types of incidents. 30 mouth lacerations or tooth injuries are included in those. According to bankrate. Com, iowa is the best state for drivers while california is the worst. Its study evaluated all the states based on commuting time, insurance premiums, gas costs, car repairs, car thefts and auto fatalities. Thats the news update this hour. Back downtown to squawk alley. Carl, having spent a lot of time in l. A. Traffic, i would agree with that survey. Take the surface streets, sue. Thats it. Thanks a lot, sue herera. Well get the european close in a few minutes. Seema mody is here. Seema . 11month highs really led by italy. It is the bestperforming europe crayon stock market. Shares up almost 12 . Reassuring news from its new Prime Minister today saying his government would be ready to take action to support the troubled italian banking sector. Speaking of the italian banks, unicredit surprises with a drastic overhaul, largest bank of italy announcing raising 13 billion euros to shore up its Balance Sheet and unload 18 billion euros of bad loans. The share issue was planned for the launch in the First Quarter of 2017. Shares are up 30 so far this month but still have lost half of its value year to date. Now a different story for the miners, which are falling. Production data out of china. Anglo american, down 2. 6 , reporting a slow down in diamond sales at debeers. Its blaming indias cash crackdown, a move unveiled by the Prime Minister is now hurting Global Companies like debeers, the largest producer of diamonds by value. Guys, back to you. Seema thank you very much for that. Seema mody. Well take a short break here. When we come back well talk to ambassador Nicholas Burns about tillerson going to state. Trumps Foreign Policy outlook. Meanwhile, were watching the dow. There are many things you dont want in industrial strength like coffee. But theres one thing you do. You guys okay . its called predix from ge. The cloudbased Development Platform thats industrialstrength strength straight ahead on the half time report, investor John Fichthorn will join us. And why one Analyst Thinks the rally has a lot more room to run. Well see you at the top of the hour, in about 30. Thank you very much. Donald trumps impacts on markets is not the only thing weighing on some minds. Morgan brennan is back at hq watching that. On the heels of the two tweets targeting defense programs, we took a look at other platforms that could potentially be focused on the trump twit pulpit. Lockheed martin, northrop and raytheon. Seeing a number of vessels break down and unit cost morse than double since the programs inception, General Dynamics and lockheed is involved in making that ship. The b2 bomber program, produced by Northrop Grumman and ohio class submarine program, getting start but could potentially represent a large sum of money. Defense spending is expected to increase. Cyclically its poised to trend. As those dollars are spent the key question is, the possibility of that defense contractors do more risk sharing on costs as the government buys, quote, smarter, which trump has vowed . Also worth noting, 30 of every modernization dollar is consumed by compliance. So some of the restructuring we could see may likely take place inside the pentagon itself. Guys, back to you. As boeing hits a 52week high. Morgan, thank you. Rick santelli and the santelli exchange. Good morning, rick. Good morning. Thank you, kayla. The first day of a twoday fed meeting. We also know its december. Last december there was a tightening. Do we look for a second . I certainly think so. 25 . I certainly think so. 50 . I really wish but i dont think that will happen. Lets look at fundamentals, shall we . Two charts. First, import prices year over year. We want to draw your attention to the fact that the right side that have chart and the left side, which is around july of 20 2014, are at the same place. What does that mean . Weve had the smallest net year over year change in import prices since the summer of 2014. That means theyre going up. There were bigger negative numbers. There were big price drops coming in. Much of it was energy. Thats a fundamental toenlg consider. Another fundamental bant eebant around, tenyear yields. This chart starts in september couple of months sooner but last time we toyed with 2 or higher was september 2014. Were pretty much there now. We know the last fed meeting showed us an Unemployment Rate well below 5 . Its hard to argue with tightening and even hard to argue with it makes real good logic, good sense that with regard to the big massive moves to the upside in rates, upside in the dollar and major league upside in the stock market, the fed should wait and see how real, what actually happens. Well, thats a real asymmetric approach. When it came to nervousness about china, when it came to nervousness about brexit or even the election of trump, all of those were viewed as uncertainty with a bias toward weakness. The fed had an opinion on this, whether they admit it or not, all Central Banks did, uncertainty with weakness. Their answer was stay more commodative than normal or postpone modernization. Why does it work in the other direction . Only one survey people should Pay Attention to, Federal Reserve participants in particular, best in history and that surrounds me, market pricing, investors putting their money where their mouth is. Investors are banking on a lot of things getting done. The symmetry of that uncertainty should be viewed as strength not weakness and policies should move accordingly. John forte, carl, kayla, back to you. Rick santelli in chicago. Thank you very much. As you know by now, markets hit new highs. Dow closing in on 20,000. Joining us is jp morgans Global Market strategist a. Couple of people drawing attention to cell signals, overextension, elevated sentiment. Others say analysts are behind and the stocks are discounting what the analysts eventually will do. What do you believe . Theres a lot priced into the market right now. Definitely room for a little bit of disappointment next year. I would say that this doesnt necessarily feel overextended. Yes, the market has moved pretty far, pretty quickly. If we take a step back and think about what the Economic Data was doing in the Third Quarter and into the Fourth Quarter of this year, we were seeing an acceleration in growth. Part of the rally weve seen, while its built on views of what may or may not happen in 2017, part of this rally is built on improving market fundamentals. I feel like there is still room to run. Do you agree, brian . Yeah, on the equity side, i think theres more here. Even on the bond side. Most of these big moves, if you look in the past, take two to four months to play out. While a lot of the move has been front loaded, of course, theres still more to play out over the next month or so. David, how do you protect yourself, though, if you are nervous about dow 20,000, bill gates telling us that even he thinks stocks are a bit expensive. Do you go to gold and miners . Do you go to a particular International Market . I think that its important for investors to think about the short term versus the long term, given whats happened over the past six weeks or so. We look ahead to 2017, we think that there are probably more opportunities in the u. S. Market than there are in International Markets. We think thats particularly the case for u. S. Based investors. Our expectation is the dollar is going to strengthen a little bit, which may hurt returns from international assets. A lot of fantastic companies in europe. I dont think anybody would argue with me when i say emerging markets will be at the Growth Engine over the coming decades. I would view this as an opportunity to make sure that you have sufficient international exposure. Va valuations outside the u. S. Are more attractive than they are domestically. Make sure you have your ducks in a row before the end of the year. Depends what your investing time horizon is. You just mentioned that the market is front loaded. What do you mean by that . Is there a sense that were shifting gains to 2016 that we would have otherwise seen in 2017 . I do think there is a sense that weve shifted some of those gains forward and just looking into bond market what i meant specifically by that comment is when you get the big moves, the majority of the move comes in the first month or so. That doesnt mean the move is over. We continue to see some of the trends that play out. Continue probably not to the extent weve seen so far, but i think there is a real possibility that some of those 2017 gains, as you think of equities, have been moved forward a little bit. David, in terms of sector rotation, today is just the latest example of a couple of downgrades on names like coke and proctor, the theory being those are used as a source of funds to buy industrials, caterpillar and anderson. Does that make sense to you . Over the shorter teller. Take the guys who may be hurt by a stronger dollar, stronger domestic growth relative to International Growth and use them to fund positions which stand to benefit from the proposed coming nine to 12 months. Whats really important right now is that investors take a longterm view. Its my opinion that the stock market thinks donald trump will bowl a 300 here. There will be some disappointment along the way. I wouldnt get too wrapped up in the narrative which has evolved the past month and a half or so. Stick to your longterm investment plan. Make sure you have exposure to industries, which i should benefit from the incoming administrative policies but also maintaining exposure to stuff thats unloved. Valuation, in our view, should always be an investors guide. Lot to think about as we watch the indices today. Brian, thandavid, thanks for yo time. Thanks for having us. More on that pick for Rex Tillerson for secretary of state. After that, could the rise of machines create more jobs than it destroys . More squawk alley after this. Some breaking news out of our nations capital. Jackie deangelis is standing by with a special guest. Opec secretary general is speaking at the center for strategic and international studies. He has given comments on not only the 2016 worlds outlook for opec but also talking about those appointments we heard about today, the nominations for secretary of state and Energy Secretary as well. Your reaction to what president elect trump is thinking right now . Thank you very much for having me. As i said, Rex Tillerson is an outstanding, accomplish ed who has rose in this industry to be a leader, ceo of the largest oil and gas company in the world. And with that experience he brings a lot to the table as secretary of state. We in the industry who share the same primary with rex and are very proud of his outstanding performance and Leadership Qualities in the industry. And i think the United States is extremely lucky to have such an asset stepping into the state department at these challenging times, considering the geopolitics of the world. As i said earlier, theres a very thin line between oil and geopolitics and diplomacy. Therefore, rex is an understatement to say that he is highly, highly qualified to step into this role. And on behalf of opec and our member states, we want to use our medium to extend our congratulations to him and to the president elect for making this quite an important and timely appointment. And the recent opec cut that we have heard about is not just an opec cut but also a coordinated effort among many nations, nonopec members as well. The importance of a Global Platform is becoming very key here. Talk to me a little bit about that and how till erson might play in that role as well. Yes. Tillerson has been a champion for stability in the market. I listen to him in london when he addressed the Global Oil Conference in london. He has been a strong advocate of this stability. What we did in algiers september 28th, reaching the algiers accord and in november in veei a vienna, reaching the vienna agreement. And on saturday september 10th, having that historic meeting with 11 nonopec countries led by the russian federation, taking coordinated action in times of managing our supplies to restore stability on a sustainable basis in the oil market, establishing this platform of cooperation, which we intend to solidify by engaging consuming countries as well as Companies Operating in this industry, including shell oil, Oil Producers in the u. S. Who have been playing a very Important Role in meeting demand. Lets talk about pricing. After the cut was announced we did see a little bit of stability back over 50. Where do you expect to see prices next year, what range . In opec, what we are committed on is the restoration of stability on a sustainable basis that will ensure continued and Sustainable Investment in a predictable manner in the industry. As you know very well, this industry is a very highly capital in terms of industry and in the World Oil Outlook youve had investments in the last two years across the industry. That is threatening future supplies, which is not in the interest of either the industry, producers or consumers. Not to talk of the entire global economy. So this platform is to ensure continued stability, getting all the key players on board, particularly Oil Companies in the United States, be they conventional or nonconventional and other institutions. Secretary bardindo, thank you so much for your time today and thank you for sharing perspective not only on the Global Marketplace but how president elect trumps appointments here, nominations could potentially impact the global diplomacy that were going to see as it relates to Energy Industry policies as well. Very, very important discussion, kayla, hew erin washington, d. C. Back to you. Thank you very much for bringing that interview to us. Jackie deangelis with the secretary general of opec. Take a look at where it is right now. Wti crude down about one cent. Now unchanged. Brent down by just about ten cents right there. From the Energy Market to the overall changing workplace. More companies turning to automation causing concerns around the world about a potential dwindling job market but others say automation could create more jobs. Here is what labor secretary designate Andrew Puzder said last may. We need to be able to set people up for better jobs, revamp the Education System so people are qualified to do the jobs that exist. Whats happening now is the cost of labor is accelerating at such a pace that it really moves up how fast you want to automate. Joining us now is where are they coming from right now . You know, we educated over 20,000 students in our threemonth programs all over the world this last year, and they really come from a wide range of backgrounds. We have everybody from Computer Science majors from Carnegie Mellon all the way to starbucks baristas, and everything if between. In general, most of our students have College Degrees already, and theyre looking to either upgrade their existing career path or change careers entirely. These skills that really help Companies Lead the way into the future that were all imaging. And how is that helping those people become more fully employed beyond what they would have otherwise been doing in their job. Theres been so much discussion around heavy industry and retraining factory workers to be able to work in advanced manufacturing. This is happening on the software and on the Services Side as well. It is. I think its going to happen a lot slower, and were talking about decades. Not necessarily a couple of years before all the jobs are going away all throughout our economy. I think these things it will happen in phases. I think what were seeing in the sector is that we that we work in and the skills that we train for and the employers we work for is that these skills are growing quite fast, actually. The price of labor is actually increasing in these skilled jobs because its so in demand, and what he was really commenting about is that there is this gap between the supply of that Skilled Labor and the demand of it, and thats what he was sort of saying we need to fill, and i think thats partly the role that we want to play in this economy as we go through these 20, 25, 30 years of change. Where is the hope if you see it for those middle American Families that are not in big cities, maybe everybody there doesnt have a college degree. Theyve lost the manufacturing jobs, and they are hoping for a turnaround. You tend to focus in the big cities, whether in the zu. S. Or abroad. You say most of the students you see have College Degrees already. Where is the hope for everybody else . We are focussing at the in demand skills. There are many opportunities to create more efficient programs to bridge the world of education and the world of employment. When we talk to companies, they have huge demand around these data science skills and soft wear development skills, but they also have demand in other parts of their organization for different types of Skilled Labor, and theyre not sure where they can go and get that. They try with community colleges, they try with the local universities, but theres a huge opportunity to reduce the cost of that on boarding and honoring a process to get new workers into their labor pool, and i think theres a massive multiyear opportunity there as well. Yeah, were going to be having this conversation for years as a transition happens. Jake, thanks for coming in. I think so that for having me. Squawk alley will be right back. [engine revving] is it a force of nature . Or a sales event . The season of audi sales event is here. Audi will cover your first months lease payment on select models during the season of audi sales event. Whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley the top democrat says he is deeply troubled and marco rubio says he has serious concerns about Donald Trumps pick for secretary of state Rex Tillerson. For more, we are joined now by former assistant secretary of state nicolas burns. Nicolas, good morning. Good morning. We just heard from the opec secretary general who says theres a thin line between oil, geopoliticals and diplomacy and that makes Rex Tillerson an ideal choice for secretary of state. Where are the winds blowing here . What do you think the concerns are that people should be focused on when it comes to tillerson . He is an impressive individual. He has long experience in running one of our largest and most complex companies. I think the questions will resolve around Donald Trumps views on russia. Youre hearing from Senate Republicans and Senate Democrats real concern that Donald Trumps views on russia are out of line with the american mainstream. He has refused to criticize putin on ukraine, on crimea, refused to criticized putin for intervention in our election, refused to criticize putin for putins vicious bombing of civilians in syria, and so i think thats where thats where this nomination is going to be tested at the confirmation hearing. People, senators, are going to ask these very tough questions. What is the emerging trump position on russia . Frankly, as a citizen, im troubled by what donald trump has been saying. I think its too weak and too accommodationist towards russia. We ought to be containing russia. Mr. Ambassador, do you see any asymmetry between trumps arguable hawkishness on iran and dovishness on russia . Do you see it that way . Its odd because sclad mere putin is it includes hezbollah in it. Of course, it includes president assad of syria. A troubling combination. I agree that we should be trying to prevent iranian influence in the sunni world in the middle east. I think we have to have a policy designed to support the gulf allies saudi arabia, the emirates, and others. At the same time, you know, weve got to be concerned about europe. Europe is our largest trade partner investor. Nato is our largest alliance. Putin is testing nato in the Baltic States. The questions for donald trump are will he continue the energy and financial sanctions that president obama, chancellor merkel and the e. U. Have put on putin . Will he continue the deployment of american and nato forces into the Baltic States and poland to contain putin and to deter any kind of trouble with our nato allies . All the signs from donald trump are very troubling. Is he going to stapd up and support him . These are the questions, i think, that go well beyond one nomination. Theyre important questions. Do you think that the now Senate Majority leader Mitch Mcconnell are being too flippant in their words . Im a very close friend of Condoleezza Rice, and shes my former boss. I have Great Respect for Condoleezza Rice and bob gates, and i take their opinions very seriously. I think Rex Tillerson is an impressive man with an impressive background, but my focus has to be i think all of our focus has to be on what is donald trump going to do . He is going to be the president. He will be making these big decisio decisions, and im worried about many of the accommodationist statements he has made about vladimir putin. Weve got to leave it there, ambassador burns. Many thanks. Snoo thank you, thank you very much. Lets get over to headquarters and the half. Im scott wapner. Our top trade this hour dow 20,000. Stocks closing in on that historic move as we roll on. Jim leventhal, john, pete najarian. Were also joined today on set by another