Transcripts For CNBC Squawk Box 20161212

They used to force companies to buy stock. Now its prohibited. Earlier in the week when we did 300 i messaged you and said, this is definitely it. We have to call the top here, definitely. This has got to be it. They keep going. Another 142. Hope springs eternal. 19756. What is interesting is that, you know, things havent even been done. So we dont know whether deregulation and cutting taxes and progrowth supplies, we dont know whether they are going to put them in. But there was a question recently about whether those things even work. So now were seeing this, we dont know if they are going to do it, but just the possibility we might do them is worth 2,000 points on the dow. And dont you think every single cabinet member he names leads you to the conclusion that it is going to happen. Its got to be the most probusiness cabinet since ronald reagan. I had a great talk with al gore. It was interesting, it was nice, we got along really well. And he picks the Oklahoma Attorney and its been happening one after another with things like that. How rick perry could be running the department of energy that he thinks shouldnt exist. Obamacare, we had a good talk about obamacare. I even like some of it. And he picks tom price to do it. Tillerson is the one that you guys might decide, this might be the one that i like it. Youre not going to draw the line here . He lives in Climate Change, my friend. Unlike you. He does, ive had conversations with him. Ive had conversations with him, too. Ive had conversations with him on a golf course. You know, you think he has no you dont think he has to actually do you think oh, so tell everybody. I have talked to him about it. So he lies when he goes in public . The same people are highly skeptical that co2 is the ultimate determinant are you suggesting what he said publicly hes lied about . No. I dont know. Hes telling you Something Different than he said publicly . When i pinned him down on it, he expressed skepticism about the afintive manmade elements of Climate Change. Can i parse this, he can believe that the temperature is rising but its not necessarily because of man . Ive heard him say publicly he thinks man is responsible for this. What do you expect the ceo of exxon to say publicly . You are making his it wasnt public. Im saying it wasnt public. His confirmation hearing could be a problem if hes a denier. Its going to make it a lot harder. Absolutely. Trump cant be president because hes a denier. Just because the president by the way, he has republicans in the party that have other views in the world. Heres the thing, Climate Change will be the least of Rex Tillersons issues during the confirmation process. Right. In fact, its the least of the normal person of the american publics concerns as well. Dead last every time they talk about it. And around the world, in fact, i have seen polls. Except for the whole liberal mindset, you have to get used to things starting to swing the other way, my friend. I recognize that things im not sure they are going to swing the way you think, but well see. Youre kidding, really . But youre sure lets do headlines. Let me just ask you one thing, does co2, does it cause the warming or is it causing any bad weather that we see anywhere . Is it causing more storms or more tornadoes or more droughts or more floods . Or is it just im no scientist, but my understanding is it is causing some degree of warming and that warming unto itself may be causing storms in other types of surges we havent seen. I have seen much colder winters are predicted now. Im serious, im going to send you the latest clearly other people have different views on this, there are. Interviewing Insurance Company executives about whether or not let me finish my sentence. No, because Warren Buffett will tell you on the annualized basis year to year hes not worried, but longterm there could be a problem. Thats all. You cant price it. You cant price it on the year to year. If you think theres absolutely a connection between rising temperature and more catastrophic events, then of course you can raise prices when it comes to insurance. The church of Climate Change the church of climatology at this point doesnt know if they are talking warming or whether it is adverse weather event. Its both, but it makes it so much more when it is justifiable. When did trump announce youre joining the administration. Trump wasnt even running given all the comments you have, im hoping theres an opportunity in the office for you. You got me. You got me. You were ready. You were armed and ready. Just saying. Here are the big stories. Roll the teleprompter, please. Oil prices are surging to their highest level in a year and a half. Thats after opec and nonopec producers reached a deal to reduce output to cuts of 1. 76 Million Barrels a day to 24 countries that currently supply more than half the worlds oil. Look at the screen, it went as high as 57. 89 this morning. Wti is at 53. 79. It looks like one of the highest points in the session with gains of more than 2. They are gains of more than 4 for both wti and brent. Natural gas, by the way, look at that. Lower by almost 20 cents. A decline of more than 5 . In corporate news, boeing reaching a 17 billion deal to sell 80 jet liners to iran. This is the first major transaction between an American Company and iran since donald trump was elected. The deal was first announced in june, officially sealed yesterday. The u. S. Companies including boeing began talking to iran earlier this year after a nuclear record removed sanctions on tehran. But there are questions on whether donald trump may look to slow or stop dealings with the islamic republic. Meantime, airbus is close to finalizing a deal to sell passenger jets to iran as well. Because of sanctions, they have some of the oldest fleets in the entire world. So the country is desperate to upgrade their planes. Fords ceo says president elect trumps threats will not change the plans to move small car production to mexico. Trump said hell impose tariffs on companies who move jobs abroad. But mark fields says the ford focus will be moved from michigan to mexico as plan because American Consumers demand low prices for small cars. And cnbc confirmed google is planning to expand services in cuba. That gives cuba an access to google servers that accelerate internet speeds for google products including goe ining goh and youtube. Eric schmidt is expected to sign the deal in havana. Tomorrow we get novel import prices and the fed begins a twoday policy meeting. The announcement on rates comes on wednesday at 2 00 p. M. Eastern. We are 2 50 now on the tenyear. When we did the futures, we should have done oil and the tenyear is what we should have put there, followed by Janet Yellens News Conference. We have not showed the tenyear yet. 2. 05 . 1. 05 on the euro. 1. 15 on the yen. The dollar is strong. What is weird, the dollar is strong as oil is up 5 . That usually doesnt happen. Which is weird. Those are the things that probably needed to be said. A quarter point Interest Rate hike is going to be announced. And well get november sales and ppi. On thursday, the november cpi and the latest philly fed survey. Finally on friday, november housing starts. President elect donald trump may be about to fill two cabinet positions with the coo of exxonmobil and onetime political rival john harwood is joining us now from washington with more on that story. Good morning to you, john. Good morning, andrew. For weeks we have been watching this roller coaster on secretary of state. And youve had moments where rudy giuliani, where mitt romney, where David Petraeus, where bob corker appear to be the frontrunners. It looks now, not final, not official, and donald trump even tweeted some mystery about it over the weekend, but it appears that Rex Tillerson, the ceo of exxonmobil, is his likely choice to become secretary of state. He defended that choice yesterday on Fox News Sunday with Chris Wallace. In his case, hes much more than a business executive. Hes a worldclass player. Hes in charge of, i guess, the Largest Company in the world. Its been a company thats been unbelievably managed. And to me, a great advantage is he knows many of the players. And he knows them well. He does massive deals in russia. He does massive deals for the company, not for himself. Massive deals in russia, thats going to become a point of controversy. You had some republican senators yesterday including marco rubio, put out a statement saying a closeness to Vladimir Putin is not a trait im looking for in the secretary of state. In light of the cias conclusion that the russian government was tied to interference in our election, you did have a bipartisan call for an investigation. Dont know where thats going to head. Now theres another cabinet post that donald trump is looking to fill, possibly this week. And interestingly enough, his choice may be former rival rick perry, former governor of texas, somebody who called donald trump a cancer on conservativism in his own campaign. And hes the likely choice for secretary of energy. That just happens to be the agency that he forgot about when he and i had an exchange at the cnbc debate in 2011. Take a listen. You cant name the third one . The third agency of government, i would do away with education, the commerce, and lets see i cant, the third one, i cant, sorry. Oops. Now, he was talking about the department of energy, wanted to get rid of it, now he may be heading it. There are other contenders as well. Well be watching for appointments all week, guys. Thank you, john. Appreciate that. In the meantime, billionaire bill gates announced a 1 billion fund thats focused on combatting Climate Change through Energy Innovation investments called the break through Energy Venture fund. Gates will serve as chairman of the fund and anticipates being actively involved. Jack mao will serve on the board among other investors will be saudi arabias prince. And jeff bazos will join. Bill gates will be sitting down with becky quick, an exclusive interview right here tomorrow at 8 00 a. M. Eastern time on squawk box. Well get back to the other markets, here are some of the other things to look at here. Well look at currencies. Number one, it gets dicy when actually, it was 105 earlier. Those are the lowest levels we have seen for it recently. Theres the tenyear, 2. 51. Ive had people say, are the fed going to raise . Its like it doesnt matter, the tenyear is already done. Its already done. And its kind of interesting, if you do worry about where Interest Rates are based on what we may see in the coming administration, it seems like we may be too low based on the kind of plans that the Incoming Administration has. Its like we may be playing a little bit of catchup. The next couple of years with tax cuts and theoretically a trillion dollars in infrastructure deregulation. And all the other things, deregulation, could be much faster Economic Growth. Even if it is temporary, it just seems like they might be behind. They havent you know what . Its one thing about the last eight years, they havent been behind the curve at zero based on the Economic Growth for the past its actually been okay. Its actually been okay to stay at zero. Stocks coming off five positive weeks in a row. Really, we forget, i think, we were at 1705. We were below 18,000 for the election. It is 2000, it is a really 2,000point. The dow and nasdaq all broke records. The fed will start a twoday meeting. Joining is ed campbell, managing director. Julian emmanuel is here from ubs security. And all the correlations we have seen that we took for granted for years and years, some of them were thrown out the window. Oil is up 5 . The bond market has been, like, imploding, or at least rates have been rising and the stock market goes up every day. So all these correlations or linkages are suspect at this point, maybe for a gooden are, maybe because well have faster growth. Ed . Yeah. And until the research we have done on pe ratios and Interest Rates, we may have talked about earlier, but our view is that higher Interest Rates are not really an obstacle for good stock returns. That p. E. Ratios are generally higher and stock returns are better in a normal Interest Rate environment than in a very low Interest Rate environment, because very low Interest Rates signal deflation risk and anemic growth. So i dont think higher Interest Rates are an obstacle for brighter stock market returns. And were generally bullish looking forward. And you saw oil today. Im sorry, gold, 1150. That makes sense with the stronger dollar. But if were blowing all these, you know, if were blowing the deficit out and ennation is coming back, when does gold move . At some point the dollar needs to take a rest. Along the way, i mean, we really have discounted if you look at it, the biggest thing for us is ceo confidence. You look at every measure of ceo confidence is basically soaring over the last 30 days. And thats really been, you know, the story. America first is trading the dollar higher. And ceo confidence is why oil and the Economic Expectations have increased as much as they have. So we get 20,000 before the end of the year do you think, ed . We could get that this week. Its only half a percent higher. The 21,000 is in sight before the end of next year. 2300 on the s p to 2400 next year. Thats like a 2 on the low end, i mean, really going out on a limb, what do you think 2017 . I think 2017 is going to be a good year, we certainly could see 8 to 10 returns on the s p 500. Thats going to compare favorably to what you get in fixed income. You get 2600 or 2700 then. Where you think youre going to get negative returns out of bonds. So i think the dominant theme that youre likely to see for 2017 is a continuation of the u. S. Reflation theme. This trade is going to wax and wane, but we do think its a new trend. Donald trump is not a vix 11 president by any stretch of the imagine nation. Hes made it very clear that part of his plan is unpredictability with the rest of the world. By that standard, the market is likely to trade higher because of this growth impotus. If you look at the last year and a half, you have the ups and downs, big volatility moments. We continue to expect that will be with us in 17. So in 2017, what is your prediction for the highest quarterly print on gdp next year . I think you will see a three handle at some point. We saw that last quarter. Anything above in terms of quarterly gdp, you could get high numbers. I think in terms of the overall year, were looking at Something Like 2. 75 or so. So were not going above 3. 00 next year . The speed limit in the economy is a lot lower given the productivity growth. But i think well see more growth than we saw this year and more inflation. The cruise liner around, eight years to turn it around, were not ready yet with 4. 5 unemployment at this point . Were not ready for liftoff . 2. 75 growth for a mature developed economy is pretty good growth. Its okay. Just relax. Let the consensus lay there. Well let the conventional wisdom stay there. Do you think we can achieve 3 to 4 growth on a trend basis . I think thats probably too much to ask. We could achieve that over a shorter period of time. In the 80s we were not a developed economy . Well, in the 80s we had faster Labor Force Growth and in the 80s we had faster productivity growth. In the 80s, maybe they start mentoring i do think we can get a rebound in productivity growth, but i think 3 to 4 growth is probably too much to ask for. You would think that larry kudlow thinks possibly 5 . I think we can get at least a 4 , but they will realize that theres more than just snapchatting. You can do tinder. And then you meet people does that help productivity growth . Yeah, at the end, if they get married. They have babies. Follow us here. You cant just hook up forever, right . Settle down. How many times are you going to you want to be with somebody you care about. What you want to see in the stock market, you hit upon this does this situation get the millenials interested in investing for the first time . That may happen. I think that is possible. Thats your up side right there. Do they start investing in individually equities or start being etf and mutual funds . But it leads to buying. Yes, but it changes the equation on how the whole thing works. We think its going to be a good year for active management next year. Okay. Thank you. Are you active management . We are. It might be a good year. Thats when you really need guys like you, julian. Thank you. I love when you guys say that. Coming up, much more on the trump transition, a closer look at the potential secretary of state pick in Rex Tillerson. What is next for exxonmobil if he takes that job. And later, new reaction from china over trumps comments on the one china policy. Squawk returns in a moment. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Welcome back to squawk box. The dow is up 23 points. The s p is flat. The nasdaq indicated down over 20. Take a look at the yield on the tenyear after it moderated its upward move a little in recent sessions below 2. 40. We are solidly above 2. 40. We are at 2. 5 . Thats a new intermediate term high in the yield. And the crude prices also similar. I would think its been a number of months, we are up 5 , but we are still up solidly up almost 54 a share on wti and crude. President elect trump is expected to name exxonmobils Ceo Rex Tillerson as secretary of state. What does this mean for the shareholders of exxon . This hasnt gotten a lot of attention just yet. Good morning to you, andrew. This is a twopart story. First for the company and management. Well look at that. The Succession Plan and the heir apparent were put in place last year. Darren woods worked his way up through the ranks at exxon starting as an analyst in 1992 and has overseen the companys business units. The consensus is it should be a smooth transition, but the bigger question is how will this impact the industrys secretary of state . And shares of exxonmobil as well . As ceo, he oversaw operations in over 50 countries. While he has no normal diplomatic experience, he does have longstanding relationships with global leaders. Tillerson is being scrutinized for his ties to russia and the relationship with Vladimir Putin. Over deals done there with rosneft. The central issue is if he would put business ahead of other geopolitical issues. This is a concern some worry has a broader impact even though it could be positive for Energy Companies in general. How would tillerson advise the president elect on iran . A country with Plentiful Oil resources but a regime with policies that present so many conflicts. Expect many of these questions to be raised by the senate in confirmation proceedings, guys. Would he be soft on russia is the idea . Not just because because it would help exxonmobil in theory, but does he have some kind of relationship i keep reading hes close with putin, but just because you have negotiated deals with the leader of a country doesnt mean youre pals or friends or that you like each other. This is a different role than being ceo of a company. Its being a diplomat. The trump strategy is different when it relates to russia, which is to say he may believe if we can become friends with russia, then he can put pressure on china in a different way. Meaning the way we have traditionally thought about the various chest pieces are so different than i would argue the last two president s thought they were going to do that. President bush looked into Vladimir Putins eyes and saw his soul. And Hillary Clinton showed up with a reset button with the big mistake. I mean, every president recently has tried to do this. I think maybe if you have somebody who really does know Vladimir Putin, maybe youre at an advantage. You know, there is something to be said about the enemy. If you can crush isis, you might be a reason to boric wiork with russia. Some people think isis is more of a threat than co2. Some people, not everybody. Coming up thank you, jackie. Wide he held stocks that could be in your portfolio from walmart to starbucks. The stocks that could see an effect because of the Trump Presidency is next. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. Come on why doesnt verizon offer unlimited data like tmobile . Is it because their lte network was built six years ago . Six years ago . Thats like a hundred. In phone years their lte network is older, slower and they limit you. Switch to tmobile, the newer, faster and unlimited network. We cover 99 of the americans verizon covers. Switch your family of four to tmobile and well give you 800 to spend anywhere you want. They are the natural borns enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. Is it because so many go after it the same way . Chasing after short term returns. Instead if getting caught up with the crowd, the Investment Managers at pgim take a long term view, teaming specialized active investing with riskmanagement rigor, to seek out global opportunities. We manage over a trillion dollars this way, attracting many of the worlds leading investors. Partner with pgim. The Global Investment management businesses of prudential why pause a spontaneous moment . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis. Welcome back to squawk box on cnbc. U. S. Equity futures at this hour are probably really close to where they were five minutes ago. They are up 23 on the dow, down. 33 on the s p and down 24 points for the nasdaq. At trump tower in manhattan, a small group of tech execs included larry page, apple ceo tim cook, facebooks ceo sheryl sandberg, microsofts ceo and ciscos ceo, ibms ceo, intels ceo and oracles ceo. They also say amazons Ceo Jeff Bezos was invited and likely to attend. Im still wondering on elan musk. Hes not on the list so far. Do you want him on there . I do. I think hes one of the most fascinating people in america right now. If you look at what hes doing both with tesla and solar city, hes created 1400 jobs. I know theres the government subsidies that you have i was just going to say, hes working hard on subsidies. We can talk about that. Donald trump has no problem in using social media to call out big business as we saw last weekend with boeing. Now were looking at how a trump target could have an effect on the biggest names that could be in your portfolio. Joining us is chris malone from fidelity partners, which is latin plural for fidelity. Thank you for telling me that without studying latin. Are there companies more likely to be in the targets of donald trump . Are you predicting names you worry could fall because he tweets about them . I think there are easy targets. Like what . For instance, volkswagen is an easy target. For investors who are seeking to kind of identify profit opportunities and threats during a presidency by donald trump, we really have to expand our thinking beyond what drives the markets to include what drives president elect donald trump as a man as well. Were showing people right now, walmart, booz allen, volkswagen and samsung electronics. Booz allen is who Edward Snowden worked for and a second individual was arrested this summer accused of stealing secrets. It seems pretty obvious, what do you think happened . 97 of revenue comes from government contracts. The nsa is the largest client, the most popular Spy Organization in the world. Donald trump has a lot of leverage given his emphasis on cyber security. When you look at the oneyear chart, it has risen dramatically since the election of donald trump. So that could be something that if the investors could be very disappointed if you turn out to be right. Exactly. Theres all this runup, everything related to defense, but if donald is going to look to do two things with the bully game, hes looking to score points. So this Economic Group that you mentioned, ceos coming together, hes going to look to score points with the companies and e tract the wins from that. And then hell be able to settle the scores with organizations that he thinks have fallen down, similar to booz allen. Hold them to a higher standard. In the long run, they will do well in terms of defense spending, but hell extract concessions out of them. Walmart . I think as donald trump gets into the guts of obamacare and looking to roll that back in certain places, an easy target are the companies that are holding down the hours of their parttime employees to avoid paying them benefits. I think theres argument to be made, they are not paying their fair share and could put real pressure on walmart to step up and do the right thing, reduce the burden on taxpayers for health care coverage. Very interesting because walmart, the booze allen chart was dramatic in response to the election. Walmart has not responded that much even though its up 18 year to date. Samsung . Sam susung with the recent crisis related to galaxy 7. That i are in a weak position rebuilding their reputation, but a small production for semiconductors in austin, they are selling tons of phones in the United States. Put some jobs here. And i think they can have a lot of threat from him if he were to apply pressure. So i see in the notes that you think tesla the trumpproof, meaning you think he could tweet about tesla and still it would survive or he wont tweet about tesla . Tesla is an example of a large following. They have one of their own. So he could probably have more points and more success scoring a win from them, earning respect, gaining some support from elan musk than he could to hammer them down. Frankly, they create a lot of jobs in the United States already. And its hard to flip that around. I was curious where you stand on both apple, since there have been conversations with tim cook and his encouragement well call it from the euphemism for more than just encouraging somebody to manufacturing here in the United States, also where do you think amazon lands given the latest comments hes made . The ceos have strong followings, over 60 million iphone users in the United States. 70 million amazon prime customers in the United States, very loyal followings. So apple and amazon are two different cases. With apple, were the largest most respected companies in the world. If you have gain their support, extract minor concessions, hell consider that a win. With amazon, the criticism of them is really about the Washington Post. And the criticism he received from jeff bezos and wanting to get more favorable coverage from the Washington Post. And so i think that amazon was an easier target for him to go after, but again you dont think hes going to try to break up amazon then . No. I think hes going to try to rattle the sword a little bit and say, i expect more favorable and reasonable coverage from the Washington Post and jeff bezos, but amazon is not a soft target for him. Hence you put those on the trumpproof list. Along with starbucks as well. Yes, starbucks, they are kind of the model citizen in the United States as an employer. Paying benefits for the parttime employees, got high wages, education assistance, Howard Schultz is very vocal with liberal politics, but i dont see donald trump being able to kind of leverage very much pressure on starbucks. Chris, thank you for coming on. Pleasure to be with you. When we come back, donald trump calling out the one china policy over the weekend, and now china is firing back. Well bring you details of that as we return to a break. Well check on what is happening in the overseas markets. We are back in just a moment. D can you explain to me why you recommend synthetic over cedar . Super food . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. [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. Welcome back to squawk box. Time for the executive edge. President elect trump questioning the 44yearold diplomatic recognition of the one china policy on fox news yesterday. I dont know why we have to be bound by one china policy unless we make a deal with china. Having to do with other things, including trade. This morning chinas state media is lashing out at donald trump. Eunice yoon is joining us live with more on that reaction. Reporter thank you so much, michelle. The staterun News Agency Xinhua just posted commentary moments ago. The headline is principles, not impulsiveness are needed for u. S. china ties. This comes after the china times describes trump as naive like a child when it comes to Foreign Policy and a man who has no idea how dangerous his words can be. Now, thats the tenure of the state press, but officially beijing also issued a stern warning top donald trump saying that if he were to backtrack on the one china policy, that the u. S. And china would have nothing to discuss. This is what the Foreign Ministry had to say earlier today. Translator the one china principle had political backlog for the compromise if it is disrupted. Reporter china considers the one china policy as core to the countrys principles. In fact, the u. S. Has recognized it since the 1970s. And thats why there was so much shock by so many people in china when trump started calling that into question. And guys, ive been talking to Business People all week about this, and everyone ive spoken to is deriving a little bit of satisfaction from seeing china so rattled and irritated. But at the same time, one longtime china watcher was telling me all this confrontation would be good if it leads to something productive, but his concern is that he believes when it comes to the relationship with china and the u. S. , you need a scalpel instead of the unguided missile to try to maneuver the relations. Guys . Why are they deriving satisfaction . Youre not . I think its pretty much because of all the issues that we have talked about, the currency, trade, a lot of companies here are so frustrated because of what they perceive as a lack of market opening. And so all of these the American Companies have so many legitimate concerns and frustrations with what they see as protective policies in the part of china. But they do want to see somebody rattling the cage. At the same time, what this one china watcher was saying to me was he was concerned that taiwan is such a sensitive issue that it just starts to it could potentially lead to confrontation for confrontation sake instead of actually addressing important investment or other Economic Issues that many of these American Companies want to see addressed by china. Which is exactly why i think probably donald trump picked it. He finds the deepest and most hurtful scab and right there, we saw that through the entire primary and through the election as well. Apparently its not going to change now. Eunice, thank you so much, from beijing on that story. Do we worry that it opens up something if you woke up one morning and there was some true action that takes place as a function, then its not just a well see if it actually happens. Then its not just a game of chicken. The United States doesnt have to tiptoe around the world. When you asked that question, werent you one of the people thinking some satisfaction was there . I just wanted to draw out the answer for the benefit of our viewers. Okay. You can take a congratulatory call from anyone. Were you here when the ceo was here and we had a discussion with steven roach . I do remember that. Lets talk about hollywood right now. The weekend box office, Disneys Moana taking the top spot. The animated feature with dewayne the rock johnson brought in 18 million. One of the songs is from your friend from hamilton. Closing in on a second, the rrated Comedy Office party debuted with 17. 5 million. In the movie, Jennifer Anistons character tries to close her brothers business. He tries to impress a climate. Thats a great premise, the Office Christmas party. So many things can go wrong. And the latest Star Wars Film rogue one will open this friday. The crowd went wild with applause when the credits rolled. I heard so many good things about this. The numbers will be off the charts. Its a good one. There have been a few disappointments in the star wars the last one did tremendously well. But this one, apparently, its unclear. This is supposed to be a closed end, meaning its a standalone, not part of the trilogy. There was word that rogue one could become its own but its not set up like that. So the question is, what happens next . Thats a guy from the night of that is maybe next on my what to watch. The guy is in hes a star of the rogue. Coming up youre behind on watching star wars. Im just getting to the last season of homeland. That was like three years ago. Its a year ago. Im all caught up on game of thrones. Im all caught up on the american. Im all caught up on the homeland. Are you worried about quinn . I think he comes back. Isnt he cool . I think hes okay. I think hes okay, hopefully. Well see. And more communication satellites are in the sky other than any other company, which makes it a problem when you have to replace every one of them. The ceo will join us about talking about the climate business under the trump administration, although it is big business. As we head to bank, heres a look at s p 500s big winners and losers from last week. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. Okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. When spacex suffered a launch explosion back in september, it not only destroyed a satellite facebook was hoping to use, it pushed back spacex launches, and it would have carried ten satellites about the size of cars into orbit, and that Company Getting ready to execute a complicated refresh of its aging satellite fleet, who is now the ceo of the communications. We need seven successful launches. The next 18 months we will be very busy. Its important your market cap is approaching 1 billion for the company, and its 5 billion you are spending to do this, right . 3 billion. I would be nervous. Its a huge Capital Program and one of the biggest in aerospace right now, and its a large undertaking and we have been at it for many years and preparing for this day and very soon we are going to start our launch plans and thats quite exciting. Like 20 years ago, something similar happened. The satellite was going to go up and there was an explosion. Aridam. Was that filling out the whole, you know, the whole fleet . You mean this recent explosion that just occurred . Back in 98, something similar happened, didnt it, and you got all 66 up there eventually . I think history is repeating itself, hopefully not for the company itself, but the first time it was launched the company was launched almost 20 years ago, and there was an explosion of a gps satellite, and the network was put into space in 1998, and it was not a Business Success at that time and we started the business in 2000, and here we are ready to have the largest tech refresh ever in history. Its exciting. One of the things you will know, wherever commercial airliner is on the planet, right, in real time . Theres been a lot of talk recently how antiquated our air Traffic Control system is, and they want to make it better for many reasons, we would not have missing airliners like we have had, and thats one of the things you can do, right . Is that data that people would that be valuable . Can you condense it to an individual air Traffic Controller can use it and nowhere everything is . Thats one of the most exciting new features of the new satellites, each one has a receiver on it and they can hear any aircraft in the world no matter where it is, and relay that second by second to an air Traffic Controller. And the rest of the world is safe but inefficient in the terms of the way they manage aircraft, and the new satellites, they can see every airplane from the Vantage Point close to the earth and it means it could go point to point quicker and burn less fuel, and be more efficient overall. Thats a big business and a big opportunity for us Going Forward. Its michelle here. Many, many years ago, i interviewed ae lawn musk before he was a household name. He said right now it costs 10,000 per pound to go into space and i want to get down to 1,000 per pound. I assume it has been beneficial for you, but before the only game in town were governments, correct . Yeah, commercial space has been here for decades, and it would have been so much more expensive if we did not have a launcher like spacex. They revolutionized the cost for space and it looks like they are going to do that even further Going Forward. Iridium. What is the insurance policy on this stuff . Its a combination of you actually write normal insurance and Self Insurance because we are building extra satellites. If we have issues space x pays for it . No, we pay for it. It includes satellites, and rockets and ground infrastructure insurance. Thank you. You drop them off, and they just they end up being fine in orbit . Yeah, so we put them up into about 100 miles below our current satellites and its going to be a very busy 18 months. Thank you, and we appreciate it. Good seeing you all. Thank you. Rocket science. Coming up, the march dow 20,000. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Global markets eyeing crude this morning after oilproducing countries reached a Historic Deal to cut production, and wharton finance professor, jeremy siegel. And will tiller sun be the next second of state. Here to discuss the possible pick, and what it says about the trump cabinet. Is America Running out of ideas and is it hurting Economic Growth . The puppy was like industry in that they were both lost in the woods. A closer look at what really could be ailing americas economy. Except that the puppy was a dog, but the industry, my friends, that was a revolution. Greg eup is here. And the second hour of squawk box begins right now. Announcer live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box this is billy squire. Sorry. And andrew ross sorkin, and michelle futures at this hour, the dow now up 32, and the s p is positive and the nasdaq weaker, down 21 points or so and we have had five straight weeks of pretty good gains and the dow 20,000 hats are on order. You know what i pulled out of the closet . My dow 10,000 hat. I will cross it out and put 20 there instead. Rightly so. Its me, and i am reading page six. In headlines, tech out the action in the tenyear treasury, and the yield raising above the 2. 5 mark, and has not closed at that in more than ten years. Theres worries about a surge in inflation which would diminish the return in debt over time and we will have more on that in a minute. And looking ahead to the twoday meeting, and the markets are considering a rate hike all but certain. And bowing reaching a deal to sell 80 jetliners to iran, and this is the first major transaction between an American Company and iran since donald trump was elected. And boeing began to talk to iran earlier this year after a Nuclear Accord removed sanctions, and now there are questions as to whether president elect trump will look to stop some of the deals. Google expected to sign a deal in cuba this week to expanded some kind of internet services. Guys, these are two countries that clearly have seen major, major changes in the relationship with the United States with barack obama, and now with president elect trump coming in are you going to see the deals get undone or not occur at all . Theres a lot at stake here. Can you do the deals and not fulfill them . No, do them and still have a problem with Nuclear Enrichment . Can you undo or change parts of the iran deal and still sell them stuff . Thats what trump would want to do. You dont want to tell boeing they cant sell 17 billion worth of airplanes, and airbus will do that if boeing theres another air path there. I dont have a problem selling commercial stuff, and i dont like when we send unmarked bills to them in a plane and deny it for days. I want boeing to sell stuff to everybody. I dont know if i want to sell, you know, patriot missiles to iran, or some defense im not sure. Its a tough one. I dont know. How do we do it . I am raising the question as to what actually happens. Theres going to be a big uncertainty there, right . And the same with whatever has gotten done in cuba. Its good to sell i dont know whether we have things to do with the centrifuge, can it be turned back its a complicated deal the way it was structured. Its nuclear science. And yeah, the allies, would they do it anyway . Does it show up in the Intelligence Briefings . Are you worried about him pence will read it and if theres an issue he will tell the president about it. Apparently its the same stuff every day, and he has generals dont you think a general like mattis it was the tax returns, and now its the intelligence briefing . Every president in history has read things things, supposedly, and maybe this is normal course like your generals and the if its mostly the same type of information every day, and you can delegate certain things if you are in a position to delegate, right . Would you be that uncomfortable . You know who did not delegate anything, but you were not around, and jimmy carter never delegated anything, and he made every decision and micromanaged the entire four years. Reagan would do it every day, though. You said he delegated everything and didnt have a clue of what he was doing. That was the cold war. That was a different time. So you think its okay . Donald trump is a different person. Hes a different completely person. Hes not ronald reagan. When you have three generals already in your cabinet today is the day to pay attention. This matters today, absolutely. Cut through it. And tillerson expected to be president elect trumps secretary of state. So tired. Its good discussion. Can trump do anything wrong . Anything . What . John, we will get to you in a second. Is there anything that trump can be done . He may do a few things wrong, but he doesnt do everything wrong. By the way, theres a lot of things that i think he could do very right, including tax reform and we talked about all the issues, but i am saying anything ever on a morning where you could say, maybe i have a little misgiveings . Maybe not directing capital . Well, john joins us now with more. Am i supposed to talk now . Your panties are all bunched up. Joe, you and andrew done for a second . I dont know. Ask him. I am fine. Im good, john, go ahead. After all the talk about rudy guiliani, David Petraeus and mitt romney, it appears donald trump is honing in on Rex Tillerson as his secretary of state. Tillerson does not have diplomatic experience but has Global Business experience at the highest level and donald trump told Chris Wallace on fox news yesterday that was just fine. In his case, hes a world class player. Hes in charge of, i guess, the Largest Company in the world. It has been a company that has been unbelievably managed, and to me a great advantage is he knows many of the players, and he knows them well. He does massive deals in russia and massive deals for the company, and not for himself. Theres going to be pushback from not only democrats but from republicans, and rubio tweeted out yesterday that being a friend of Vladimir Putin is not an attribute i am hoping and you have a call from Chuck Schumer and john mccain among others for a bipartisan investigation into the cias conclusion that the russian government through intermediaries interfered in the u. S. Election to help donald trump, and it adds uncertainty to this pick as well as the general environment over the next couple of months. The unfortunate part is it will fuel this whole conversation about russia and it helps to feed that narrative, and its going to be thank you. I wanted to ask what happens to romney in all of this . The question is, has romney played . Now that romney no, because romney was very negative, right, publicly negative by bringing him in under the tent, its impossible for romney to run around and screaming about how bad donald trump is given he was in contention for its an interesting policy. I couldnt careless what happens to romney. Hes dead to you . He lost. John kelly previously served as the u. S. Southern command, and we will see if tillerson gets to be the guy. Another big step towards dow. 243 points away from the milestone level, and this morning the fed and oil taking center stage. And Oil Prices Surging after a year half, and nonopec producers reached a deal to reduce output, and it went to 57. 89 over in europe, and it had gone to nearly 54 per barrel this morning, and gains at 4 for both of them. Here to talk markets is jeremy siegel, and processor siegel, you see a picture in the paper this morning, and you like that photo . Wait, there it is. You dont want me to move it, you want to move the camera . No, thats not him, thats not jeremy siegel. You are still the dow is right around the corner from 20,000, right . Yeah, based on the futures, we are 1 away and we could do that in a day. The next thousand is going to be harder, i think, than this last one, but, no, the bullish trends are still in place definitely. Are they more so in place because of the election . Oh, yeah. I think this is 98 a trump rally. I mean, we have a pro business president. We have the prospect well, more than a prospect, a strong likelihood of substantial Corporate Tax reform, which we really need, and just as important, reduction in regulation. Those are the two things that businesses want to hear that investors want to hear, and those are priorities of trump. Certainly we always worry about protectionism, but the first two are what i think are on investors minds and they are moving towards a favorable outcome. So if 20,000 is a faya calm plea, what is the next stop . You think about 5 , and at that point we have to wait and see, but at this point markets are saying good things are going to happen, and then they are going to say, all right, lets have some of them start happening because very honestly we are at a rich multiple on earnings, so we have to have some of the earnings come in for it to move for the next thousand. Gina, are you as optimisic . No, i am not as optimistic as dr. Siegel. There are reasons for that. He mentioned, yes, i think multiples are rich and if you look at expected earnings for next year, they are quite optimistic, and a lot of what has been pushing this rally is we have seen earnings repair over the last four quarters, and it has bench needed. We have had four straight quarters of negative earnings, and as we see the repair happening, thats beneficial. Removing the uncertainty of the president did help unleash some of that and when you talk about the muchneeded tax reform, and effective Corporate Tax rates used to be at 50 , and now they are at 20 and i am not sure how much further you can drive that down and get the beneficial idea of what everybody has in their minds as to what is going to happen, so much of that will be harder to realize, so i think theres that reality that we are at a different place. Also when you talk about deregulation and corporate reform, thats putting rocket fuel into an engine and the engine we are putting it into is not the same engine as they put it into ten or 15 years ago, and we are faced with highdebt burdens and low growth, so i am less optimistic. Professor sieger, last word . I think Corporate Tax reform is going to be important. Lowering statutory rates. Think of how much money corporations spend trying to move their money from one place around the world to another, and if we can rationalize that totally crazy system and thats a big gain in efficiency. We know we are going to bring a lot of money back from abroad, and thats going to rationalize the system, and unless regulation, we have been overburdened by regulation for the last eight years and thats definitely going to move in the right direction and thats a real strong positive. Thank you so much. Good to have you on. Sorry about the photo. Thank you. Coming up, nbc has learned donald trump will pick tillerson for second of state, but close ties to russia already getting attention about a senate confirmation. And Richard Turnill joins us about one of the largest Money Management firms expectations, and squawk box will be right back. With patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. President elect trump will nominate john kelly for secretary homeland security. Do you know general kelly . I do not know him personally. Some of the others do you know, general mattis . Met him but dont know him well. A lot of generals. I know wilber ross. General ross. Yeah, hes a business general. Just overall before we talk about Rex Tillerson and that possibility, although its not official yet, looking down the list, what is your general impression of the people that you can see right there . General mattis, and ross, and sessions, and price . Elaine chao. I think its consistent with the campaign and the positions taken by the president elect. Which one is most problematic to you at this point . Pruitt, and tom price . I think there will be controversy over pruitt, particularly over his strong opposition previously to the agency which he will run. The e. P. A. , exactly. I expect when all is said and done, most of them will be confirm. Biden finally said sessions was okay, even though he opposed the judgeship 20 years ago. And there were confirmation hearings before the inauguration . We did that when i was the majority leader for president bushs some of his nominees, particularly at that time secretary of state, he wanted secretary of state confirmed quickly and we did that. And it was kind of tongue and cheek, but for the Vice President biden to normize sessions. Hes off the reservation and calling everybody a racist. There will be plenty of other issues. Yeah, maybe. So overall we have to ask ourselves, who has the most Nuclear Weapons . We have the most and russia is close. Do we want to be friends with russia or confrontational with russia . Its like if we look like its going to be a less hostile relationship, its almost like people on the left would prefer a hostile relationship, and i guess its because of syria . I dont think thats the case, joe. What do you think it is . We should be friends with every country in the world and want to be, but if you begin with the premise that the United States and russia relationship problem is the United States, thats the wrong premise. Keep in mind russia violated International Law in the ukraine, and the statements from putin were false. You are an expert on the middle east, too, senator. What should we be doing in syria, the red line do we work with them or against them . Do we want assad gone still . We should work with them where we can, but its clear that in the syria discussions they have been dragging their feet, and enabling assad to regain control of aleppo. Let me go back to my earlier comments. In response to russias illegal actions in the ukraine, the United States led the effort to impose sanctions on russia. Its had a dramatic affect on the russian economy, and they are striking back, the hacking is something that maybe some dispute, but it seems to be clear what has happened. We should have better relations with them but cant begin with a premise that its all americas fault. We are acting in what i hope is a responsible way. And the relationship with Vladimir Putin, thats beneficial or not . I think less significant than the relationship, which could be beneficial, is the position on sanctions. I hope if he is nominated he will quickly say, no certainly later than the hearings, that i supposed sanctions on russia as a private citizen and as a head of a Large Company that was adversely affected by the sanctions, but as secretary of state i represent all the people of america and i believe the sanctions program is the appropriate response. Senator, how should we think about the news over the weekend about what now seems like more confirmation around the hacking, even though i know president elect doesnt believe thats the case . Theres clearly going to be an inquiry a bipartisan inquiry, we should say, by the way. And the allegations that have been made in the press have to be demonstrated and proved, and conclusions have been stated in the press and none of us know underlying data, and its hard for the public to make a judgment when you have one side saying its so and the other side saying it isnt. You need to divulge enough information as can be so the public can make a judgment. Mike pence is taking the honestly i am less concerned about that than i am about what happens once he gets in office. He is dependant upon an Effective Security service which he has trust in, and thats important for any president , for any public official. The boeing deal over the weekend with iran, is it in jeopardy or will it stand . President elect said he will tear up the agreement. I hope he doesnt. I think that would be a profound error and it would contribute to upheaval in the region and possibly involve the United States militarily more deeply. They are going to make us go, but the taiwan policy . That was negotiated by the republican president and it has been american policy for many years, and democratic and republican. Do you think its right to open it up right now . Does that make sense . No. What is the risk on the other side . The reisk is rupturing relations with china, and trump feels its onesided and you can address that but you dont have to tear up the relationship to address what grievances they have or we have. How dangerous of a moment we are in right now . I dont know. I cant assess the nature of the danger, but there was a time in our history when there was a real danger of military action involving the issue of taiwan, and thats why president nixon negotiated the onechina policy to reduce that risk. Thank you, senator, and good to have you on. Thank you. Coming up when we return, what is black rock saying about the trump rally and where it will take us, and we will ask the global chief strategist, and check out futures at this hour, and you are looking at the dow that could open up higher, and the s p up about a point and a half. Were back in a moment. Welcome back to squawk box. And iran has a deal to buy boeing jets. Political opposition to the iranian and u. S. Nuclear accord could threaten that deal, and lots of conversation about that. Private equity may be able to strike a multibillion deal, and it could be more than 5 billion earlier this year there were reports kkr were considering a deal. And then the movie took in 18. 8 million in north american ticket sales. And i bet i know who is going to win the box office next weekend. Rog rogue 1. And then the breakthrough Energy Ventures fund, and gates will serve as chairman of the fund and anticipates being actively involved. And among the other investors in the fund, saudi arabias prince, and Richard Branson and bridgewaters ray dolly o. You can see the interview with bill gates here tomorrow morning on squawk box. Turning now to the markets in 2017, will the trump rally of 2016 continue into the new year . And richard joins us, and theres some big picture predictions, i think, richard, and we are going to try and use it and still be how to use the big picture to drill down what we need to do on a daily basis, reflation. You refer to it as a trump valley and the dynamics driving the reflation theme was going to be before the trump win, and i wrote analysis that inflation data globally is picking up steadily, and we have seen that in the u. S. And we saw the chinese produce data coming in on friday, and we saw Energy Prices start to rise as well. We are getting the shift from monetary to fiscal policy we have been talking about for sometime, and its really amplifying the reflationary theme. We think the bond yields have bottomed and its important for where you want to be with the equity markets. Some of the risks you highlighted are political and policy risks, and nobody knows exactly what the president elect is going to do. I kick it back to where you are, and michelle and i i dont know if you saw the mea culpa that ferguson said he was trying to keep his friends in, and he went against his own principles in going against brexit, and now now he says brexit was correct and hes glad it happened. And it might be italy next, at least some people think so, and god knows what could happen. Should we hope that tide has stemmed or should we assume the cohesion of the eu is bound to fail . I think one of the lessons of 2016 has been that the economic fundamentals are just coming over the top, trump thatting any political risk, and investors that focused on the shortterm political risks missed out on the longterm fundamentals, and those short term risks still exist, and what is more important in tkreufing markets is what happens to Global Growth and inflation and what that means for corporate earnings and what that means for policy, and all of those things are lining up for the more even tphraeugs nary environment. What do i do with the merging markets, because historically u. S. Interest rates rise, emerging markets get crushed, right, for the simple reason if i can get a certain and more secure return from the u. S. Treasury, why would i put it at risk in the emerging markets, and they have to raise emerging markets, and yet the expectations, theres going to be greater growth around the world, and how is that going to play out in the emerging markets . Do we do it or dont you . Well, they are Going Forward and thats because the concerns you highlighted about high Interest Rates, and if you looked at what happened to emerging markets since the ele t electi election, there was a lot of fear there, and then it comes back to what is driving yields higher . What is driving the upward move in Interest Rates . That has been driven by stronger Global Growth. We know emerging markets historically have been a key issue for that growth environment and in particular when that is related to growth and Commodity Prices, and the gap between the merge between stronger Commodity Prices and the weakness in emerging markets, that cant be sustained. One of those things cant be right. Our view is you want to be in emerging markets, and of course you want to be selective in where you take your risk with emerging markets and i think the u. S. Election focused people on that emphasis on selecttive ty, and perhaps it has been more cautious to other areas, including china where we have large current account surpluses with the United States. Do Equity Investors have to fear the end of the you know, the 20year bond rally . If it is going to go the other way we think Financial Assets are correlated . Is there a way for the markets to keep moving higher as the Interest Rates make a steady move to more normalized levels, or maybe we are still in a low Interest Rate environment, but can we handle it now . Yeah, we believe that equities can move higher in a gradually bond yield environment. Lots of precedent in history where that has taken place and you will start to see money flow out of fixed income into equities, and the key is that the rise in yields likely to be gradual Going Forward, and that could be driven mainly by rising growth and inflation expectations, rather than a rise in the risk premium associated with bonds. So broadly equities can be doing well in that environment and what you will see is the continued rotation within the equity market, and so there are parts in the equity market where they will struggle with steeper yield curves, and those what i describe as the low volatility areas of the market which have done well, and other areas, such as valued stocks and japan do very well in the environment. Lucky for the fed, and they get so nervous if the market trembles at all it would be nice if the stock market would be able to hold up, and thats what is going to happen, they will be bailed out and be okay in spite of themselves. You now have full anticipation of the fed hikes, and the market is resilient. Nice to be able to catchup with the overall market and say i am catching up and never had to make that decision to take the punch bowl away. He could be a guard at buckingham palace, never moves yeah, and the gains in science and technology. We will discuss about the article last week on that, and we will look at the u. S. Equity futures. Okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Welcome back to squawk box. Its a big week for the fed and economic data. Steve is here to walk us through all that stuff. A lot of stuff, and the fed expected to hike rates this week, and theres a lot of information. Will it boost its growth and inflation out looks in the summary rates . And its important to consider what would be most important, and significant to all of this is the inflation out look and we get a lot of it, and our friend over at pan neon rights, it could be a serious problem force the fed to raise rates rapidly. Import prices come tomorrow and the trend there is down. Capacity utilization, the trend is down, and cpi, the trend is up. Guys, you remember, its been a very long time since we have seen an important trade based on an inflation number and that may be about to change, and thats why we will watch the inflation data closely this week. Lets talk more about the broader economy and president elect trump, and you wrote a piece the economys problem is we are out of ideas. Way to depress us this morning. Sorry about that. You say outside of personal technology have been incremental and not revolutionary . Look at the data, andrew. We have headlines about robots and Artificial Intelligence but the underlying story is what is happening to our standard of living, and productivity is terrible and its the worst since the 70s or 80s, and so amazing as all the advances are, they are not showing up in peoples standards of living. Last year was the First Time Since 1993 that mortality worsened in the United States and people are dying more from Heart Disease and drug overdoses and so forth, and not withstanding the great medical miracles the companies are announcing they are not affecting the average persons life span. A couple things going on, some of the low hanging fruit in innovation is taken care of, and the big killers of children are solved with vaccines, and then we are making it harder via regulations to take risks, and because we are an aging Society Fewer people at that stage can be try something brave and novel. It sounds like the end of history, and it sounds defeatist. You know, i believe it. You dont think productivity rises and falls through a cycle . We could be on the verge of a big breakthrough . I am not making the case the growth is zero, but i am making the case that the 2 growth has been deeply depressed. The other point i want to make, i am not saying its terrible and we have to accept it and go out and eat dirt, but we have to grasp the underlying causes and come up with solutions for them, and one basic solution, the regulators have to be a bit more accommodating for the risk taking process, not insist that we be 100 safe before we try out a new driverless car or drone. The other thing, its taking more researchers to get a breakthrough idea and we need more people in research and stem education. How are you accounting for this thing, the thing i am holding up, and its the iphone. This thing used to be an entire room about 30 years ago in terms of the Computing Power in it and all that it can do . Look, theres Robert Gordon from northwestern university, he has the iphone on the right side and the toilet on the left side, and which one would you rather go without is what he asks the audience, and the iphone doesnt measure up to some of the most amazing breakthroughs we have had in the past. I could totally get that the iphone is way better and does more things than my blackberry did ten years ago, and this is one very narrow area of innovation. When i talk to people in the Tech Industry or silicon valley, they always bring up the iphone and i ask what about materials and medicine . I want to make one point, which is the productivity is essential to growth and economics, and yet we do not have a theory as to why technologies are developed when they are developed and how they are developed, and in terms of things that we can forecast, we can much better forecast things like life expect done tea and inflation better than productivity, and i have been perplexed at how Robert Gordons work is becoming conventional wh wisdom, and the point i want to make ultimately productivity will rise and fall on things like investment, and we have had an investment drought over the past couple of years, and if we can get Capital Investment and the tools in the hands of the workers that is possible, and we would get a bounce in productivity . I think you are right, andpi been zero, and we should be able to get it up to 1 , and getting more investment is part of the story, and the risk on rally that we have been experiencing since election day, it gives me hope, theres animal spirits out there in mainstream Corporate America they dont want to take chances and invest, and if theres a selective return of animal spirits because they are optimistic, that would bring us more investment and growth. Greg, i will tell you one thing its what i have a feel for, the medical advances, and it would be sort of impossible to explain a slowdown in medical advances given how we are starting to understand so clearly what goes on. I am talking about rationally understanding now that we sequenced the genome, and its very difficult, and theres all the gene regulation, and its going to be a quantum leap. I understand that it is taking longer than people thought, but it will be a quantum leap and will blow your mind what is going to be possible. I saw something last week and didnt agree with with it, but it was written by some doctors trying to explain the mortality, how we finally flattened out, and you know what they blamed it on . You dont believe this. What . Obamacare. That looked to me, and i dont know if you could tie to have mortality declining to obamacare, but these were doctors that said actually the system has suffered in terms of quality, and they used that to explain for the first time we had not seen an increase. Can you point, joe, and i dont know the answer to this and i ask it skeptically, is there something that has happened because of the genes that prolonged life . We sequenced the jaw gnoma a decade ago, and the first theory came out in the 90s, and today we have one commercially medication genetically that is treating one person. Its scary. You do one thing and a lot of things happen, and before you doette kau see, you do you dont want to kill the patient. I am hopeful that what we have been talking about is about to have a boom. Nobody disagrees that doing stuff to help productivity is good. I dont know about that. Dont we need more education and maybe i should write a paper on that. Produtkubd okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. We will talk markets, and donald trump expecting to tap Rex Tillerson as secretary of state, and we will have more on that picks u. S. And russian relations when squawk box returns in just a moment. The march to do you 20,000. It looks this week on the basis of futures, we are 1 away, and we can do that in a day. The trump transition. Donald trump expected to tap another ceo for his cabinet. Exxon mobile ceo rex chitillers for secretary of state. We will hit the field after the teams big win, as the final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box here on cnbc, and futures this morning have been slowly heading up, and up now 31 on the dow, and last week was a great week, fifth straight positive week as we and the dow closes in on 20,000, and the s p now positive, and oil prices were strong this morning. They were pushing 55 for a while on wti, and now moderated a little bit, and now to 53. 75. Wti. Global markets are waiting on the feds twoday policy setting meeting which begins tomorrow, and the central bank expected to announce a rate hike, the second in a year. Janet yellen will hold a News Conference following that decision. And trump expected to nominate exxon mobile Ceo Rex Tillerson as secretary of state. And his ties to Vladimir Putin could lead to resistance. In his case he is much more than a business executive. Hes a worldclass player. Hes in charge of, i guess, the Largest Company in the world. Its a company that has been unbelievably managed, and to me a great advantage, he knows many of the players and knows them well, and he does massive deals for the company. In other transition news, and donald trump will nominate john kelly as the secretary of homeland security. And then joining us now on the squawk news line, the director of research at buckingham. Good to have you here. Had you already priced this in to boeings earnings . Correct. We were pricing this into the deal. There were stumbles, as you know in november, the house voted to limit the Treasury Department from giving a license to banks to finance the deal, but in a sense, i think almost everybody, including myself, thought this was pretty much a done deal. What other companies could benefit here . If they are going to buy planes, dont they have to about a engines . General election could do something . Yeah, and so for example, boeing, iran is buying 737s, and the maker of the engines make the leap engine, and those engines would be made by General Electric as well, and they would be among the big winners as well. When it comes to the revenues, do you look at them different as other revenues after the election of donald trump and uncertainty on what his policy will be . Do you have an asterisk next to that deal . I think the way you kwaub tau tpaoeu the trump affect from a boeing commercial standpoint, you have to put in a little more risk, especially with the iran deal. Everybody is aware of trumps opposition to the Nuclear Iran Deal and that could have a derivative on the deal if iran felt the United States were going back to the deal, and certainly theres a potential for repercussions. What about the wake in the tweet related to air force one . How do you put that in your model . Its a 3. 2 billion program spread out over 10 years, and barely a blip on pentagon contracting and its more of a prestige program. I dont think the program will be cancelled out right. I think the program could be restructured, and possibly down scoped a bit, and even if it were cancelled, it doesnt seem like a big earnings contributor and wouldnt be a big impact even if the program were cancelled to boeing. Should we be monitoring realdonaldtrump . With this president you have to think outside the box and have to think about unorthodoxed methods, and you have to monitor this, and its a complete new way of doing things, and this president has a different way approaching things, and we monitor this much more closely with donald trump than we ever would have before. You think about businessmen, if you are a businessman deep down and you see that 17 billion, and you are like, well, 17 billion i just dont see this this is not the place, maybe, the time or place to make a stand if its our biggest manufacturer and airbus would get it anyway, i dont know if this is where he would make the stand, richard . 17 billion is an important order for boeing . Especially, if we take president elect at his word that jobs are very important, and i dont think hes going to go out per se and attack the deal, and i dont think he will stop the deal or make an effort to stop the deal. I think you are spot on there. I do think, though, that he is not happy with the iran nuclear deal, and he doesnt think we got the fair end of that, and my only concern would be if he did do that, and upset the iranians would the iranians in retrobeauson down scope the order from boeing. Boeing is up 20 in the last six months. What do you do with the shares here . I am neutral on the stock right now, and basically my view is of the stock is that the expectations, mostly on Free Cash Flow are just getting a bit lofty right now, and i say to investors, stay neutral. I dont think the stock is going to go much higher from here, and i dont think in the near term you are going to see much selling either. All right, thank you richard, and thank you for calling in. Thank you very much and have a good day. We have news at the intersection of business and politics. Top tech will meet in a summit with president elect trump in new york on wednesday. And the attendees being called a heavy group and among those reportedly likely to attend, amazons Ceo Jeff Bezos, and microsoft ceo, and the ceos of intel, ibm and cisco also insisted to attend, and elon musk would attend but they say he has not accepted the invite and have aub obligations. Billionaire bill gates have announced a plan. Its called the Breakthrough Energy fund. Bill gates anticipates being involved. Among the other investors in the fund, saudi arabias prince awowly. Bill gates will sit down with our own becky quick tomorrow here at 8 00 a. M. Eastern time on squawk box. And u. S. Stocks coming off the best week since the election, and the dow, really, balls to the wall is what we are seeing with the dow right now. Are you okay with that, andrew . I dont know. You seem sour this morning, joseph. You guys are so smart. Do you look it up, and it means theres a throttle, and theres a ball and you push it up forward and it goes to the wall and you are going as fast as you can possibly go. I dont hear the word balls and immediately think i am forever 15, so thats the problem. You people really, both of you. I am ashamed. You look embarrassed. Its cute. He does it on purpose. What am i supposed to do. Joining us now, bill smead. You knew this, right, bill . Yeah, balls to the wall. It says terms used by a pilot, and theres something known as the urban ducktionairy. Is that going to continue, and is one sector big bank, small bank, investment bank, what is the best way to play it . Nine years of hatred dont get dissolved in 90 days of trading and so the banks have been despised and hated and pounded on and political football and et cetera, so you could have a correction of the banks at anytime. If you think of it in a historical perspective, and the first three or four months after reagans election, which peaked on Inauguration Day and went into a mild bear market and then took a cheap market to extremely cheap, and it looks a lot like this. So the banks could correct here, but longer term, its hard to see how trump is a risk taker, and we have 86 Million People between 22 and 41 that kind of need to be led, and they need to be led to take risk and need to be lead to buy houses and lead to make families and so forth and thats happening. I dont understand the dirty what would that mean . I dont know. But there was a number of songs what would it mean, balls to the walls . What does that mean . I could understand if its a throttle and you are pushing it forward i dont even understand the daughter tea, michelle. It just says something, i think. Don wilson, what about small banks . They should benefit if theres some deregulation, they should benefit from higher Interest Rates. They have not moved as much, or have they already made their move . They made a move as well, and i agree with bill, this whole group has been the most hated group since the crisis, obviously, and was the cheapest group come into the election. If you look at some of the policies being proposed and the steepening of the yield curve, and the steeper yield curve and all of that is a tail wind for this group, which was cheap come into the election. Yes, we had a great move and in our view looking forward its going to be a group that we think does very well. You go from half book, and then you get to book, and then its if it gets totally over valued, can you go to two times and where are we now . Thats kind of the history. You go to two to three times book two to three . When they get maniacal, the Morgan Stanleys got to three times book. It becomes an earning story. Everybody forgets the markets are an teus paw tory in nature, and they get better for three or four consecutive years, because if we are right, as the millennials begin to be the dominant force in the economy, marriages, babies, and houses, and then the activity for the banks goes up and they are set up to get the little knicks out of you in many different ways, and we have not had the velocity of money pick up for a long time and thats probably as big a factor as rising Interest Rates and how they do. Do you have favorites that may be better positioned or not moved as much as the rest . Well, i dont have ones that have not moved as much as the rest, but we like continue financial discover for a lot, and it was left for dead go into the election, but you are looking at a story with a lot of leverage to Consumer Loan growth, and pays a high domestic tax rate and has had the overhead on the whole group of regulation, and we still think theres 20 or more earnings power growth in that name. Okay. Thank you. Don wilson and bill, we appreciate it. Are we done . No, i can see it on your face. Its a pilot thing. I dont know why you would assume i would take it into the gutter when all i am trying to do is describe we were just talking about boeing, and you know when they take off and they push it all and the throttle goes all the way to the wall, and then you come up i am trying to see i told you, i am forever 15. Thats the problem. What does that mean if it means Something Else . To the wall . What does that all right, you know. Thanks, and nice to see you. Yeah. And you i dont know. Shares you tell me i know nothing, and lets just leave it there. You are a reporter, and you know language supposedly. Supposedly. And shares of alexen pharmaceuticals. The cfo is also leaving. The reasons for the departures, personal reasons, seeking other opportunities, and the board lost confidence in them, and the board member David Brennan named interim ceo, and cfo of phupb honeywell will become the cfo. Lots still to come on squawk box this morning. Up next, former defense secretary, chuck hagel, going to join us to weigh in on the trump transition. And then later, new york giants running back, Rashad Jennings is challenging kids to read more, and hell be here to explain, and squawk returns in just a moment. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Welcome back to squawk box. President elect donald trump is expect the to nominate tillerson for secretary of state. We have more on the exxon side of the story. Good morning. Heres what we know. Rex tillerson has been at the helm of exxon since 2006 and worked his way up the latter in 1975. Currently age 64, and if tillerson doesnt leave for a cabinet position he would have to retire in march of next year because exxon caps the time. And overall, it is higher. When tillerson leaves, darren woods is expected to take the reigns, and woods has almost 25 Years Experience of the company, and what impacts exxons stock more than management may have to do with the energy policy. Tillerson would be expected to bring an oil mans mindset to Foreign Relations and trump pledged to make it easier for companies at home, and exxon did business in over 50 countries and has established relationships with many global leaders, and there are relationships that have that raised concerns like with Vladimir Putin. I am reading all the coverage over the weekend and the focus on the arctic deals that exxon did with the russians. Those arctic deals have since fallen apart because of sanctions, and i wonder if they dodged a bullet, and you need oil, 150 a barrel for these to be profitable, right . Nobody has the crystal ball. The point was he was trying to do business there and move the ball forward and he will bring the same expertise now, and the question, of course, with oil prices at the moment is do we see the shell producers continue to pump and all the positive pro Energy Policies raise their profitability and bring the price back down . Thats the big turn, and everybody in the industry i speak to is worried about it. We will continue our conversation about the next secretary of state, and former defense secretary under president obama, chuck hagel, and a former United States senator. Good morning to you. Morning. What do you think the possibility of Rex Tillerson in the secretary of state role . I think, first of all, its up to the president who he believes best fits his philosophy to run the government, and he was elected and i think hes entitled to bring the people around him if they are qualified and capable, and ethically qualified to do the jobs that he wants done, and carry out his policies i think mr. Tillerson, who i know, by the way, and i have known him for many years, i knew him in the senate, and he is capable and i like frankly changing up and putting a businessman and experienced and capable businessman in charge of the state department, and i think that brings a different view, yes, and a lot of questions, yes, but lets go back to the political environment that produced this president. This has been an unken srepb shaw null election and its an unconventional president and i suspect to see an unconventional government. There will be hearings that will bring a lot of this out, but right now i am not bothered at all by the prospect of the possibility of mr. Tillerson being secretary of state. And what do you think about tillersons relationship with putin and how that might affect the gop landscape . It might be a positive, frankly. Before we jump to conclusions, and i read all the stories and hear the newscast about tillerson and putin being good friends, and i dont know if thats true or not, and obviously he has done business with putin and russia, and i dont see that as a downside. Obviously theres a separation, of course, there is, and i believe mr. Tillerson is smart enough to understand that and i believe mr. Trump is smart enough to understand that, and like any cabinet member, they have the interest of the United States. Can you help us with Intelligence Briefings and whether donald trump should or should not be taking them given your former role . First, i was on the Central Intelligence committee for a number of years and Foreign Relations committee, and thats obviously up to president elect trump, but i think he would be well served if he would take those briefings, because theres never enough time to know as much as you need to know in any of these jobs. I understand president elect trump has questions about the veracity, and the depth and the quality of the report, and thats okay. I think those questions need to be asked in any Government Agency and our intelligence agencies need to be held accountable, and bottom line, before everybody gets too exercised with this, and i dont have any problems if Congress Wants to open up an investigation, and it should go further than russia, and chinese and isis, others with great cyber capability are pinging on us all the time, and not just the russians. Its michelle here, and the leap that occurred over the weekend is that suddenly the cia thinks they know the motivation of those hacks. Is there any certainty that anybody can say anything about that at this point based on your experience . Well, again, i dont know first of all, i have not seen the reports so i dont know the classifications to your point about the motivations. I have read that as well as to we know the motives behind it and a number of people have been charging was to help mr. Trump get elected president. That may be right and it may not be right, but i suspect we will find out more if the Congress Opens hearings and some of them will be closed, i am sure, and others will be open hearings. I will guess there will be more and more information that comes out of this, and let me go back to a point i made. I dont think its just the russians we need to be focused on here. As i already mentioned, there are other countries with tremendous capability, and cyber is a tricky business. You are never sure most of the time, at least initially are you referencing the chinese . Who are you referencing . I am referencing i already mentioned, the chinese, the iranians and the North Koreans and isis have capabilities, and there are hackers, nongovernment entities that have capability, and i think we have to be careful here and judicious as i am sure our intelligence communities are. Donald trump just tweeted outlet trauly while we were speaking, i believe, the following. He says can you imagine the Election Results were the opposite and we tried to play the russia cia card and it would be called the conspiracy theory, and unless you catch hackers in the act its hard to determine who is doing the hacking, and why wasnt this brought up before the election . Your reaction . I think the president elect has a good point. This is complicated. This is very complicated business, and we have got to be careful here. You know, i used to ask a lot of questions, and we all did in committees, and when i was secretary of defense i would ask the same questions of the people around me, what happens next . Secretary hagel, i have to interrupt you one more time because its another tweet, and i think they make the f. 35 program and cost is out of control, and billions of dollars can and will be saved on military and other purchases after january 20th. So taking aim last week it was air force one with bowing and now hes looking at the f35. What do you think about that . Well, the f35 program has been a mess from the beginning. It had tremendous costs overruns. The congress has been paying on this for a long time, and one of my predecessors was concerned about it and i was concerned about it, and we are deep into this now and we have a number of partners that have ordered many copies of the f35, and the current secretary of defense is in israel today and israel is accepting their first fleet of f35s, and we should always be negotiating an effort to try and bring these costs down, but this is not a new problem. Stock is getting hit this morning in the wake of the tweet. Final question for you on the other boeing news of the morning, given the relationship with iran, i dont know if you saw the news that bow something going to be selling significant number of jets and planes there, and what is your take . Well, thats not new, as you know. That news has been out there for the last few weeks, and first of all, i dont know all the details of it, but i am inclined to be positive about those things and i will tell you why, and i think it enhances relationships with better understand when theres the commercial trade and that means iran is investing more in the things it should be investing in and not what it should not be invested in, and we need to be clearheaded about iran being the preimminent sponsor of terrorism, and those exchanges work in our interest, quite frankly, and we are a bit short sided if we try to cut those out and you have to be wise, but if we propose Global Economic interests, i dont know how we become the policemen of who gets what and where. That gets a little tricky. What i know of the deal, i think it works. I think it enhances american industry, and our workers and productivity, and american products. Okay. Fair enough. Secretary, we appreciate your time this morning. Thank you. And your perspective. Thank you. Some anchor over the weekend said trumps tweets are not news and will not be treated as news. What . Yeah, i just tried to find it. Private equity firm, Apollo Global is buying car lighting and l. E. D. Lighting, and will pay for a 1 stake, and phillips plans to keep the minority stakes for three years. And then a jump from that tphau sraurious, and macka lure degeneration than loosen tuesday alone. Some Major Management changes announced this morning in the pharmaceuticals, and current board member aoverhaul, and the company says the departures were due to personal reasons or for other opportunities. Nothing to see here. And sources say that the board lost confidence in them, and all of that follows a completion of an accounting probe, although alexion did not say anything that would require a statement of prior results. And then the setback for eye drug offerings, and the drugs did not produce any better drugs for the patients than when used alone. And 21st century fox downgraded the deal to buy britains sky makes sense but the regulatory process could be drawn out and put fox under pressure. And another saying that he is unhappy about the size of the offer, its too small. How about another one, and i am afraid to use it and i will tell you when we go to break. Lock, stock and barrel, do you know what that is from . I am assume its related to the guns. And theres another one, and i needed to use it, but im not going to, because of you two, because of where your minds are. With a bmusket, when you put in a gun powder, theres a piece of cotton or wad after you go into stop sometimes if you forget it, all you do is shoot its impossible to say because you will immediately think its going to be something disgusting, and its not. Look these things up disgusting is not the right word. Theres the money shot. And coming up, dropping 3 on a trump that was so good, andrew. Plus you know what, you just shot your wad and were going to talk to market master, and then there are two special parts to this interview, bill gates will be with us, and becky quick, back for a cameo appearance here in an exclusive conversation on the microsoft cofounders new 1 billion energy fund, and thats tomorrow at 8 00 eastern, and you dont want to miss it. Squawk returns after this. My business was built with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Which adds fuel to my bottom line. Whats in your wallet . And shares are pulling back and dropping sharply following the tweet by president elect donald trump. He says the f35 program and costs is out of control, and billions will be saved on purchases after january 20th. Look at the stock, now its down 2 . Its a 250 stock, and it looks bad, but its a 2 drop which is significant. Joining us on the line, and its interesting, we were talking about the boeing situation and the order from iran and i said i guess we need to be watching president elect trumps twitter feed because at anytime something can come out and this came out. How significant do you think it is in general, and its sort of like sending up warning signs that its not going to be business as usual in terms of procurement from here on out . The f35 program represents 35 of lockheeds revenues, and the program has begun to turn around and unit costs are declining so there are encouraging signs. What happened thats just today. Theres a pretty big move last week. What was that . Were you following last week . Yes, it appears as if there were investors that were adjusting their books, although theres some concern that part of the realignment of the pentagon will involve, you know, finding the right balance in terms of profitability and investment for the future. Just what you said, if i were going to defense in defense stocks i would buy them because supposedly we need to do a lot more in terms of the investment there, and number two, this is the flip side, what is a more powerful force that they are going to be held more accountable for cost overruns or they are going to get a lot more business . To preassume that theres going to be cost overruns misses the mark, and the cost of building a weapon Defense Program involves much moreover sight than what happens in the commercial world, and we do find a lot of companies have negotiated commercial terms and they do tend to deliver products faster and at a lower price with higher profitability. What needs to get into some of the details, and i think what the president appears to be doing is using a common sense approach and asking how come something cost so much, lets look at it. I am sure there will be a list of how come things cost so much and then you look at the engineering involved or the quality required to protect a soldier, it will be an understanding of the balance versus the cost. Theres a website specifically dedicated, f35. Com, and they talk about the jobs and indirect jobs created by f35, and this is a way to say this is good for jobs. And tell us about drgrumman. Theres a balance between making sure we are spending tax dollars appropriately and getting value, and its not just about jobs but effectiveness. So something might be expensive to the man on the street, and as we look into it, we find out that, you know, its effectiveness is near 100 , and you actually avoid buying more. Right. Howard, thank you, we appreciate it. On quick notice, we thank you for coming on. Anytime. Thank you both. And were going to get the take on the feds big meeting this week. Stay tuned. Squawk box will be right back. No, this is a full blown move in to the basement, youre gonna be out of work without that money from. Aflac you might miss your rent. Aww i just moved out. Bummer man. Hey i used to have my own place. Yeah . No, no i live with my mom, but its cool. Health can change but the life you love doesnt have to, keep your lifestyle healthy with. Aflac the markets could hit a major milestone very soon, and just a few points away from down. Joining us now, muhammad elerian. 98 trump, the rise since election day. Do you agree with that . I do. Liquidity, growth and inflation has had a impact on the stock market and bond market as well. We have been focussed on what stock markets are doing, and the 10year yield, about 2. 5 . What you are see something a romance of reflation, and its from the president elects policies on progrowth policies, and you heard about infrastructure and others, and it doesnt surprise me greatly. What happens from here will depend on whether announcement become Detailed Design implementation. Based on the cabinet that you have seen so far, what do you think . I am encouraged. He has picked on the economic side some people who are committed to pro growth and who have a feel for this, and its an indodge tphus disruption from the system, and its happening within the political system because of mr. Trumps election, and finally you are starting to see people have hope we can get out of the gridlock. Its about political implementation. We had breaking news about donald trump tweets, and so we have to go, but thank you for joining us. In the meantime, the shares falling sharply after donald trump tweeting about the f35. The stock down a little over 2 already, and squawk returns in just a moment. Plan your never tiring retiring retired tires retirement with e trade. Im in vests and as a vested investor in vests i invest with e trade, where investors can investigate and invest in vests. Or not in vests. Sign up at etrade. Com and get up to six hundred dollars. Well be with you shortly. Yeah right. Xerox Predictive Analytics help companies provide a better and faster customer experience. Hello mr. Kent. Can i rebook your flight . Im here xerox Customer Care services. Soon to be conduent. Wait im here mr. Kent . gasp shark diving xerox personalized employee portals help Companies Make benefits simple and accessible. From anywhere. Hula dancing . Cliff jumping xerox Human Resource services. Soon to be conduent. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Cramer joins us live next, and tomorrow becky quick has an exclusive, and will be on squawk box tomorrow at 8 00 eastern. cause theres a million things to be you know that there are and if you want to be me, be me and if you want to be you, be you cause theres a million things to do you know that there are okay, so you launched your banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. And i am a senior Public Safety my namspecialist for pg e. My job is to help educate our First Responders on how to deal with natural gas and electric emergencies. Everyday when we go to work we want everyone to work safely and come home safely. I live right here in auburn, i absolutely love this community. Once i moved here i didnt want to live anywhere else. I love that people in this community are willing to come together to make a difference for other peoples lives. Together, were building a better california. Lets get gown to new york stock exchange. Jim cramer joins us now. I like this tweets. In this case, i saw somebody over the weekend said that trump tweets should not be seen as news. We cant ignore this when lockheed goes down 5 or 6. Should we buy them because theres money spent or worried because at any minute the one we buy could get called out . What should how should we view it . I think that you have to pay less for defense contractor. This stock was red hot. Did a lot right and not that expensive and the joint strike fighters, overruns are massive. I dont know how trump can get any money back from them other than trying to renegotiate per plane and then numbers come down. Then you have to be prepared to sell the stock. So, if the government is directly involved with paying any company, you have to rethink how you feel about that company. I like your quarterback but, again, you know, couldnt you i do, too. I watched it slow motion. Knew cousins was going to happen. It was wentzs best game but at a loss. Jets, petty you watch that . That was pretty interesting. I was busy coming home. Great comeback. Thank you. Well see you in a few minutes. See how i do that . Find out how giants running back jennings taking on americas reading deficit. He joins us next. Squawk box will be right back. The first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . 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 is that they contour to your body. Rpedic mattresses. It keeps us comfortable and asleep at night. Get your tempurpedic. The most highly recommended bed in america for as low as 25 per month and 90 night free trial. Nbc universal celebrating acts of kindness large and small with the annual share Kindness Campaign inspiring others to give back. Joining us is Rashad Jennings, founder of the jennings foundation, seeks to educate and mentor children as well as promote health and fitness worldwide. And you would have commented even if its different yesterday, right . Great last night. Absolutely. I would have been here. But makes you feel that much better. 112 because of at 2 because of the giants this year. We have had a number of for the first first two matchups. Hopefully things move and well see them again. How good is this guy . Whats tony romo thinking . Tony romo is watching a young kid thats special. And i think hes probably hes coaching him up and understand whats going on and tony romo could play ball, too. Yes, he can. Lets talk about you didnt have to do all this stuff and you have a threepronged approach to your foundation. One of which is reading. In your history, you have a history of having some trouble early on and it affected not just that part of your life but your confidence and Everything Else when you were in about 15 or so with reading. Absolutely. I grew up with a reading comprehension deficit. I struggled, you know, i shied away from reading and i was that kid that when it was time to pass around the reading assignments, i kind of wanted to use the bathroom so i dont get called on. I was picked on because of it. I didnt want to public speak. I just wanted to, you know, kind of be my own person and kind of separate myself. And that really was a big struggle for me. And when i talk to kids, theres a lot of kids that really struggle with reading and i was just pushed through the system without properly being taught. Numbers are people dont know about it. May be 25 , 30 of kids grow up without being totally confident in their ability to read. Between 1 and 4 and 1 and 3 . Yes. Unbelievable. Absolutely. Thats the focus is a pill already of a reading challenge to actually inspire the kids to read and where were proud to say were inside of 35 different schools. Were impacting over 20,000 students and im just last year we had over 200 thousand dollars books read by these students. Wow. Its empowering, exciting to see the kids be excited to read and the stories that i get, the emails i get from teachers, parents about their kid excited to go home and read is well worth my time. All kids love the electronic stuff, too. Thats the hardest part now. You have to be able to read to do just what all kids are doing. Partly. Well, siri everybody else out, too. You can let her do the reading. Unless you change the voice. No. Seriously. Reading is the one element of success that you cannot hide from. I mean, i got a chance to maneuver around a world a little bit and everybody i talk to thats been successful, i mean, they have their stories and reading is a big part of it. I love how you go in and theres things when you pass you do 80 or above, you get automatically entered to get the great prizes an including nfl tickets as the giants start peaking again maybe. Weird. Late in the season. Two super bowls all right. Not weirdment its good. Okay. We have to run. Thank you. Thank you. Check it out. Dotorg. Shows over. Good monday