Transcripts For CNBC Squawk Box 20161222

Are actually seeing the euro turning lower here. Looking at crude, the picture in crude, wti down by 0. 4. Date to for brent crude. Heres big stories that we are watching today. Another wild trading session for the worlds oldest bank. Shares of monte dei paschi tell 7 in early trading after the embattled lender admitted there are no anchor investors taking up its share sale. A state bailout is expected with any losses forced on to bond holders. The president elect is tapping carl icahn as a special adviser. The billionaire investor will work on rescinding what he calls excessive regulation on u. S. Businesses. The Transition Team says icahn will not be a federal employee, and he will not take a salary. Another well known face to cnbc viewers is getting a job in the Trump Administration. The president elect is hiring economist Peter Navarro to run a newly formed National Trade council. Navarro is the author of death by china. He backs a hard line approach towards relations with beijing. It is a newly formed group. It will be interesting to see how this group interacts with the other existing trade groups already in the administration, other diplomatic channels with which the administration will be dealing with china. Navarro sat here many times. We had him in debates with people from the other side. I client believe he lived in california. He mentions its in Orange County. Hes not black sheep. Not in Orange County as much as he would be in the rest of the state. But very outspoken when he comes on. A great debater. Sometimes if i say, wow, this guy is right, right of center, then you know hes definitely he is. Perhaps a bit of a Good Cop Bad Cop situation, he can say a lot of things that everybody the administration would want to say, but formally cannot. Someone wrote in yesterday, theres a lot of people that we know well on this show and cnbc that are in the administration. Yeah. Including wilbur ross. Carl icahn now. Navarro. Across the board. You should tell squawk box guests they are basically auditioning. I think they saw speaker ryan begin his career as a guest host here. You are taking credit for the rise of all these people in the administration . It may not be a pure cause and effect. Maybe a contributing factor. You basically screened half the administration. We need to vet people. We do our part. So patriotic of you. This was deep yesterday, president elect trump, these guys if you are the president and your company its not to say you have to kiss up to the government, but there are things that the government can do that its better if youre on their side, right . Id rather be with them than against them. These guys are getting in line quickly, guys and gals. Their business is government. Exactly. Trump meeting with Defense Company ceos yesterday at maralago, his resort in florida, including lockheeds martin ceo and boeings. Trump caught both companies by surprise last month when he tweeted about the high cost of the f 35 fighter jet program, as well as the contract to build a replacement for air force one. Trump extracted a pledge from the boeing ceo to keep costs for that president ial plane below 4 billion. Well get it done for less than that and committed to working together to make sure that happens. I was able to gift president elect my personal commitment on behalf of the boeing company. This is a business thats important to us. We work on air force one, because its important to our country. Well make sure that he gets the best capability and that its done affordably. The boeing ceo said once the requirements for the president ial plane is set and the price is affordable, production will start. When trump was asked if he secured congrecessions on the f he said it was too soon to know. People have posited that boeing doesnt make a lot of money on air force one, its more of a prestige thing, and that maybe you shouldnt be gouging quite as much as you are on other programs. R d on these planes alone is north of 2 million, they have advanced communications and Weapons Systems that we dont normally have on a private jet. You know how a lot of times government contracts the people are not quite mining their ps and qs as they would with a private sector order. There might be some government waste, look at medicare. Not necessarily a line of command and accountability. Now theres motivation to get one. Do you have a drivers license . I do. Dmv. Yes. People are on 33 speed versus i dont know. I will say financial district dmv in new york city, i wo like would like to raise a glass to those people, they get you in and out quickly. I went to a parking ticket infraction, i watched the wheels of justice. This to the point of the government waste and what do you mean . This whole dmv anything any experience ive had in government yeah. Who will yell at you when theres no one to yell at them, above them theres nobody. Youre saying you didnt deserve the parking ticket . It wasnt my parking ticket. Happened to be in a car that its a long story. By the way, you know what these companies have done since donald trump tweeted . Boeing up 4 , Lockheed Martin down 3 . The impact is small. Bed bath beyonds Third Quarter profit fell missing forecasts. Growth in online sales could not offset a drop in traffic at brickandmortar stores. The Company Expects fullyear earnings to be at the low end of the usual range. Shares off about 2. 5 . Microns First Quarter profits beat analyst profits. The Company Expects Second Quarter earnings to come in well above expectations. That stock up by about 10 . Herman millers Second Quarter results and Third Quarter outlook missed forecasts. The maker of Home Furnishings citing weakness in the north American Market and pointing to uncertain Global Economic and geopolitical climate. All right. Today is the busiest day of the week for Economic Data. Weekly jobless claims, november durable goods data and the final estimate on Third Quarter gdp are all out at 8 30 a. M. Eastern time. Growth is forecast to be slightly revised higher to 3. 3 . At 10 00 a. M. , november personal income and spending. An important metric in the discussion about wages, which is one weve been having as regards to inflation. And we had a modest pullback. Talk to a couple of stock analysts here. I dont know, buy side or sell side. But a bit weaker yesterday. The dow still cloese to the 20,000 level. We are joined by karen cavanaugh, and martin lucinni. Just looking at your thoughts, both of you together, i wouldnt necessarily say that youre saying its a showme market right now. But you both have concerns, and you both make the same points. Number one, the dollar could get stronger. That might eventually be a he headwind. A lot of these things we assume need to get done, they need to get done or were ahead of ourselves. Karen, you start. Exactly. Thats what it is. I think we will see 20,000 if we get good data today. I think well see it by the end of the week. Things are generally good. Were on a whole new road. We havent been on this road before. Its a new path. Economic data is good, corporate data is good. People are worried things are getting frothy, yeah there are some animal spirits out there finally seeing pro growth policy potential, but the underlying fundamentals are good. That will push us forward. Theres always risks. Always risks out there. If you wait for the dust to settle you will never invest. If we see good data today, we could hit that milestone. Yeah. Doesnt have to be congress either, doesnt have to be legislation. Could be deregulation. I wonder whether theres that much risk to whether these things happen. One thing will happen, on january 20th, there will be like a czar, we already heard about carl icahn. In terms of what you could clean up from the private sector with these regulations still being put on in the 12th hour of this presidency. There is no risk of whether it gets passed. Theyll do that with a pen. Dont you think . I agree. A lot of that can be rolled back by way of executive order. We know that surveys taken of businesses from ceos of large companies, the duke survey to Small Business survey cite as number one government regulation and then along with it taxes as being those Things Holding back, if you will, the animal spirits of Business Owners in the suite making decisions about plans and expenditures. So that will continue to promote more positive sentiment among the Business Community which will create a self reinforcing cycle in the labor market which is good the incremental boost could come from businesses which have been absent from spending the last couple of years that could boost Economic Activity almost without regard to the prospects for infrastructure which im not sure as a consequence of deregulation and Corporate Tax reform might be necessary to boost incremental demand in this country. I think the 12th hour i totally agree with mark. Thats absolutely true. Hold on. I think the 12th hour is too late. Its an 11th hour decision. 11th hour. 12th hour, its over. The 11thhour regulations. I always wondered why isnt it the 24th hour or 23rd hour were in the United States. I dont know what they say in europe. I dont know. I think if you got a tax reform bill, karen, you cut Corporate Taxes, and you make it simpler, do all these things, that might be worth 30,000. 20,000 yeah. Right. The regulation, just do the regulations, youre probably good for 20,000. Ill take any of them. At voya, we have a price target s p 500 for 2017 of 2400. But if we see some thats weak. Thats weak, karen. Move it up. Well i want to move it up, but theres more risks out there. Im hoping im on the down side. We had 2250 for 2016, were close. Whats the return if it goes to 2400 . I might as well stay in cash. Yeah. You have to raise that. Okay. All right. Ill go back to the drawing board. See, mark mark just mark just raised it. We should see something good for 20 17. Mark, now you will raise yours to 2700 so i dont Say Something. Where are you right now. Ill base case is 2410. The price is right. 6. 5 out of the money. 2500 optimistic. 2500, if we get the great rotation from bonds to stocks, some of that money comes into the market and we get this performance chase, which we know is already underway, i think we see 2500. Im saying 2510 then. 2510. Say 1. I want 35 or something. Remember those three years in the 90s, three straight years of 30 plus percent . I guess those days are gone. I want 3. 5 lets see if we get these pro growth policies. We are on a whole new path. We dont know. We might be pleasantly surprised. Love to be wrong and underestimating that return the same. All right. Were at 15 this year, right . We werent supposed to be able to do 15 again. Weve done 9 since the election. We were stuck at 6 , 7 . You even needed dividends to get there. We got to this sub 2 gtp growth and no stock market moves in the last two years. Maybe well be surprised. Maybe the time is right. Maybe things are not quite as hopeless as some people are telling us. Thank you both. Thanks. Merry christmas, happy holidays what are we saying now . Ej is mad about saying merry cra christmas. Why. Because of the political christmas. Trump said say merry christmas. E. J. Dion said he had to write something about it. It was in the washington come post post. Coming up, the new white house National Trade council. Eamon javers has the details next. World ugly and messy. They are the natural born enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. Because when you really, really want to be there. But you cant. cheering at cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready. Because were helping leading Companies Lead with digital. News out late yesterday from president elect trumps Transition Team, carl icahn will advice trump on business regulation as an adviser. And Peter Navarro will head the new white house trade council. Eamon javers has more. These are two Trump Supporters being rewarded with positions close to the position of power in washington, d. C. Next year. Starting with Peter Navarro. Lets give details. Hes been selected to head the new white house National Trade council. This is a new group that we have not seen before. Raises the level of trade to white house significance under donald trump. Hes an economics and Public Policy professor at the university of california. He has a ph. D. Frof economics fm harvard. He is a china hawk. As hawkish on china as you can be on trade. This will be seen in bay swieij a poke in the eye. Trump wants this voice inside the white house advising him on trade policy going forward. Look at carl icahn, billionaire, again, cnbc viewers will be familiar with this name. A special adviser to donald trump on business regulations. Chairman of icahn enterprises, he has 55 years of experience on wall street. Also a philanthropist focused on education and homelessness. He opened seven icahn Charter Schools in new york city. Somebody deeply involved in education as well. Well see whether his advice to donald trump takes him down the policy path on education or on business regulations. One concern for the trump team in appointing carl icahn to a formal position here as opposed to an outside Kitchen Cabinet member, which he has been to date, will be this question of conflict of interest. A lot of critics will be swirling around icahns businesses and what specific advice is he giving Donald Trumps team and what businesses he owns benefits from that advice. If he is seen as lining his own pockets on policy decisions, that could be an area of criticism for the Trump Team Going forward. Already, hes criticized renewable fuel mandates and the cost associated with that to the oil and gas industry, because he has holdings in gas and refineries. Even at the surface right now there are some potential conflicts you can identify and point to. As a billionaire, his holdings are so vast. He will have so many different pieces of so many businesses, it will be hard for him to advise any regulatory cutback which will not benefit him personally. The trump team has this theme of conflict of interest out there. Theyre adding to it with carl icahn. If they kept him as a nonofficial adviser, a guy that donald trump occasionally has coffee with, thats one thing. Now this opens them up to constant monitoring by critics and antagonists in washington. That will ab constant theme going forward. Icahns probably got 10, 15 billion. Hes 80 years old, cant possibly spend it. Gives most of it away, the left, thats what theyll look for if he can make an extra 100 million here or there . I think so. If he wouldnt possibly spend the 15 billion hes got and giving it away, oh, he made a couple hundred dollars. Its ludicrous. What was the other thing i was going to say, uc irvine, university of california irvine. Make that Orange County. I dont know. He might not separate from the rest of the uc system. I know, its what people do. Accountability. We have to watch the conflict. I understand. I just think we should keep it in the real world occasionally. Its not someone that left the white house broke and then was able to get 750,000 per speech because his wife was going to be president. Its different. Hes got 15 billion already. He doesnt need to game the system he cant continue to run against Hillary Clinton. Your comment there draws a contrast. That was effective on the campaign trail this is a new thing. I got it. I know people will be all over it. Let me let me just bring in a point if i can of somebody i talked to yesterday, who is who is inside trump land, so to speak, who gave me a good sense, a brain dump on how wall street might be getting this trump team wrong. This person said that one of the things that wall street is so exuberant about is low regulations and low taxes. Thats a traditional republican government. But he said this is not going to be a traditional republican administration. Bowing at the altar of free markets is out under this administration. He said crony capitalists will be on the dart board. I think thats pretty much what you saw yesterday with the boeing and lockheed meetings. Donald trump not somebody who is afraid to single out individual ceos of individual companies. This company reminded me trump voters said we want you to go to washington and pfrunch it in th throat. By bringing in guys like navarro and icahn, these are outsiders coming into washington, this is an aggressive shakeup move. Carl is so good at seeing things the way they are, situations. Who needs this for him . He could stay out of public life completely and do what he does best and make so much more money than going in and trying to help his country for a specific reason. Thats whats so annoying to me. The question is why do it . I wouldnt do it . If he doesnt need it, why take the title . If i were icahn i would say, you know what . Never mind. I would. If he doesnt need t why take the title . Hes got a direct phone line to donald trump. Im sure he has his krelcell nu. Time for your holiday weather forecast. Time for wolf reynolds. You ni that wknew that was comit you . You could do either, and be cool. Interchangeability. I have never seen you in the bowtie either, dude. Its been a long time. Im channels my inner orville reddenbac hshg reddenbacher. Out west, over the four corners, rain, sleet, snow, good news for vail and aspin. Good snow. Tomorrows forecast, this one system that was in the four corners, it will grow some legs and make its way over towards the great lakes. In ohare, st. Louis, you could have delays. Back out to the west, more rain for southern california. Thats great news, for a state dealing with a drought, wonderful, for travelers, not so much. We jump from tomorrow and spring forward into saturday. More snow possibly for upstate new york, back to maine, verm t vermont, new hampshire. Sunday we have more issues moving across parts of big sky country, the great lakes, rain and maybe storms for the southern plains. Back to you in new york. Thank you very much Reynolds Wolf for that forecast. Coming up, 2016 was a slow year for ipos, but were seeing signs that perhaps twice as Many Companies could go public in the new year. And well tell you how safe your data is when you shop online at some of those popular retail sites. Come on, wake up come on, why ya sleepin . Come on what time is it . Its go time. Come on. Lets go, lets go, lets go. Woooo hoooo yeah i feel like i went to bed an hour ago. Ill make the cocoa. Get a great offer on the car of your grownup dreams at the mercedesbenz winter event. Its the look on their faces that make it all worthwhile. Thank you santa now lease the 2017 c300 for 389 a month at your local mercedesbenz dealer. Is that edible in is that here . Right there. Go take a bite. Welcome back to squawk box on cnbc. U. S. Equity futures at this hour are just slightly lower. Down 7 points or so. Are there gummy things on there . Didnt get that close. Wow. Looks tasty. I guess we have to save that. Why . Only a couple more days. Nobody will notice the door missing. Thats a beauty. Uber removed its serve driving cars from the streets of San Francisco amid a dispute with Californias Department of motor vehicles. Its all coming back to us. Already had a discussion about the dmv earlier. Uber began testing the cars earlier last year, but the dmv said they had not obtained the proper permit. Uber claims it doesnt need a perfect because the cars have a human monitor behind the wheel. The dmv and californias attorney general are threatening some legal action. In other news, on the ridesharing giant, uber is launching its first fleet of electric cars in madrid. The Company Hopes the cleaner cars will improve its image in that city run by an environmentally conscious mayor. Last month madrid unveiled new measures to fight pollution, restricting private traffic in the city center and tightening speed limits. We saw 112 ipos in 2016, but all that could change next year with with the unicorns waiting in the wings. Jackie young joins us. Uber expected to go public next year along with snap. Overall the trend for 2017 is what . More deals, smaller deals . I think it will be a positive year. I think well see deals of all sizes. Well see some larger deals, some spins. Well see the unicorns coming, really companies from all sectors. What is the impact of the unicorns going to public on the other tech ipos looking to go public . Does this suck the oxygen out of the room . Make it more difficult for others to find funding . If these Tech Companies go out, this will set a Solid Foundation for other Technology Companies. You can see the door opening wide for other Technology Companies to go out. We have the markets almost every single day trading at a new record, lets say that continues into next year. Does that ultimately bode well for the ipo market, or whoever is buying an ipo for a moneylosing company like snap or ub ser is buying at the top . The challenge is sustaining that valuation. The equity markets are at alltime highs. Investors will be discerning, they want that top line growth but also profitability. Who will the investors be . So much money flowed into these companies, they have been ability to raise money over and over and over again. Is it mom and pop who will get into the stocks . The big investor also still be in the stocks. Private funds have been making private investments into these companies, and thats great because theyre maturing. The big investors will be backing these deals. Let care led the ipo market in 2016. Will we see a dearth of healthcare in this ipo market . Deal sizes are getting smaller in healthcare for sure. Harder to mraplace. More challenging to place. You have to be a strong company. What are some other unicorns that not many people here in the United States are paying attention to. We had a number of black buster ipos overseas what are some ones that youre watching . Companies around the world are valuing all different types of exchanges. Companies abroad, you may think theyll be listing in the local markets, but companies are lining up already for 2017 that are international. They are planning to come to the u. S. We have some of the strongest Capital Markets in the world. Coming up a special Holiday Edition of executive edge, new numbers on travel, and the quiet return of the cal street holiday party. Heres a quick look at whats happening in the european markets. I think a lot of people are already gone. Well check in from st. Baarts when we return. 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 welcome back to squawk box. Lets look at equity futures, still indicated open lower here. On the dow, lower by about 9 points. Shares of actelion surging as Johnson Johnson resumed talks to buy the dugmaker. A deal would be cortisone 30 billion. Re hershey has named its new coo as michelle buck. In other corporate news, theres a new game from nintendo, its for small phones, its the new mario smartphone game. It set a download record, which is unbelievabilitunbelievabil u downloads in 4 days. Analysts worry that gamers are balking at the onetime cost. You get to pay the first few levels for free, then it costs 9. 99 to play the rest. The stock is down 15 saince th game launched last thursday. I would think in theory thats a good strategy. People want to beat the game. Keep going. But theyre not doing it. 9. 99, no. Sorry, ill play candy crush. How do you make money . This whole digital world. Twitter, the minute you say well charge you, peel go fine, im getting something free elsewhere. The internet is a great you look at what its done for silicon valley, all these gazillionaries, it does bring down costs. It commoditizes everything. Most of the time things get cheaper. You find out how sticky your product is. Time for the executive edge. Its projected to be a record year for a number of americans heading out of town for the holidays. 103 million americans, the most ever on record, will travel for the holidays. The vast majority, 93 million, are driving. Aaa says the number of flyers will be up 2. 5 over last year. Where are people going this week . Mostly someplace warm. Aaas travel agency says vegas, orlando, new york, san diego and anaheim are the top five spots being booked right now. Maybe a little disney theme to that, too. These holiday parties im reading about, theyre back on wall street. The party scene at least for christmas, for this year. Big banks had cut back yearend bashes during the financial crisis, some stopped sponsoring corporate gathering altogether, advising individual teams to use their own budgets for smaller parties. Now things are weird, as it seems to be correlated with whats happening politically. Now the climate is more optimistic. Holiday Party Spending is still down compared to 2008. Firms dont talk about it, theyre reluctant to talk about the soirees, trying to keep the parties out of the public eye. We did have this year, pimco had a flash mob of dancers at its holiday gathering. Blackstone had a black tie celebration at the waldorf. Apollo hired live statues, humans to stand completely naked sorry, completely still. Completely still. They could also be naked. They could be. A lot of statues are. They were standing still and painted like marble. A far cry from the pinnacle of the yes, but 2008 social media wasnt in its heyday then. You didnt have instagram, snapchat. I was thinking of Dennis Kozlowski and the statues, you could fill up the vodka. Just the complete overthetop parties that wall street used to have. Im sure workers out there are thinking its great the parties are coming back, we want the bonuses to be better this year. Bonuses this year have not been good. Those paychecks will come in. Or want the bonuses back in cash. Great, we have a soiree. The smartphone video that everybody has makes Christmas Parties much less rambunctious . Yes. I would be hesitant. You dont put a lamp shade on your head. The things you used to do. The things that used to happen. When you were in boulder, it didnt matter. You were in your dorm setting every night. Thats right. But everything used to go at these Christmas Parties. The original die hard people in a room. Seven deadly sins thing. Social media and the selfie, that changed a lot of things. First the volker rule needs to. The u. S. Is facing a major shortage of eggnog this year. All because producers underestimated high demand. Organic valley telling the wall street journal eggnog sales are up 60 over the last year compared with 5 increases in recent years. I dont like eggnog before. I never had it before. What . Somebody needs to get kayla eggnog right now. Its fattening and it has alcohol. Im starving, this is my breakfast here. Look at that. You took the head off one of those guys . You couldnt even wait until after the show . Ill take one for the team. I wont say who it really was, joe. I wonder who. Coming up, well eat about half of this during the commercial break. When we come back, how safe is your data when you make purchases online . Well ask the cofounder of bitsight technology, who issues daily security briefings for businesses that we interact with every day. Coming up, the dow within striking distance of 20,000. Will the trump rally power through the milestone . Or will bears take control and spoil the party . Well talk strategy after the break. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. I thyou never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do, automatically. Imagine that. A world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready. Because were helping leading Companies Lead with digital. Welcome back to squawk box. The u. S. Is returning chinas most consumer to Consumer Shopping site, putting it back on the black list of notorious marketplaces. This move against the Alibaba Online shopping site follows complains from u. S. And interNational Trade groups that argued that i know its follow the dow, is it tshdaobao taobao . The restaurant is dao over here. Are you sure its not tayo . Could be that, too. If you follow it, its yeah. Anyway, im going to call it taobao. It wasnt doing enough to police the sale of faked and pirated products. The u. S. Trade Representatives Office said it is unexpectedly high. Well, home depot and vera bradley were among retailers suffering the data breaches this Holiday Shopping season. With more on keeping your Information Safe while doing any lastminute online shopping, lets bring in Steven Bowyer of bitsite. Steven, we havent really heard that much about any retail breaches. I mean, perhaps everyone was talking about this massive breach at yahoo last week that we havent been focusing on it. But is there anywhere customers should be worried about typing in their credit card information . Yes, well, many of these breaches have been out of the headlines because weve seen such large breaches like yahoo an the dnc hack. Weve seen top 100 retailers by revenue, niemann marcus, youre talking kohls, wendys. So that was earlier in the year. Even in the last few months weve seen vera bradley and eddie bauer. Its demonstrating that retailers are still vulnerable and need to remain vigilant. For people doing so much of their shopping online, what tips would you have for them just generally . I mean, to use a credit card that has coverage instead of a debit card . What are the rules of thumb that people dont necessarily think about . Sure. Well, you have the consumers and then the businesses. Lets start with the consumers. The consumers obviously need to monitor. They need to monitor, understand what transactions are happening maybe on their credit card. If you pay cash, that risk is a bit lower. You need to monitor. Most of the banks are pretty good at refunding the fraudulent charges. But you need to watch the fraudulent charges. Businesses on the other hand need to put in good controls. They need to be able to monitor and protect, not only look at their own systems but their supply chain and watch that dij lently. Your company bitsite provides these security ratings along the lines that moodys does out there. So im just curious given the hacks that has pulled off on the twitter accounts of marvel and netflix, how much of an impact is that or would that be on twitters rating, for instance . Well, some of those impacts are really not something that the company can control. Like, a distributed analysis attack is not on the company. But it is an impact on their operations. Right . And their ability for people to use that has an impact in insurance where somebody may have lost revenue from downtime where you think about other controls that they need to put in place such as good pass control, multifactor authentications. A lot of these breaches happen because somebody had a very obvious detail that they overlooked or a well known vulnerability that someone exploited. This is where businesses need to make sure theyre watching what theyre doing. And really put in best practices for execution. But in the case of downtime from yahoo, its more of an Operational Impact as opposed to a loss of data youve seen in other breaches. What are some of the highest rated businesses that youve seen, stephen . Well, so the Financial Services has always been at the top. When we see that, its because they put in the best controls. They have a very good culture of risk management. When we see retail, its kind of in the midtier where theyre performing in the middle of the group of the different industries. Its interesting. Theres a little bit of a have and have not inside of retail. The top 100 retailers by revenue have actually gotten better. Weve seen that they have put in good practices and improved based on data and measurement, but outside of that, you start to see a lagging group where they even though theyre aware and i think at this point i think everyones aware of the risks in the Cyber Security world, but they just havent had the wherewithal or revenue to make the improvements that they need. The smaller the company is, the less theyre able to spend to actually safeguard their site. So should shoppers just avoid them completely . Or should they try and buy those products through amazon or some sort of aggregating shopping site . Youre going have a span, right . Not all retailers are the same. Its not just avoiding the smaller players and going with the bigger ones. The bigger ones will have better controls because theyre larger and have more resources. But i think you have protection with your credit cards and monitoring that. Even smaller retailers, they will have put in some sort of protections. Theres something called. R pci compliance. So maybe the small retailers are using someone who provides transactions to protect that. Its not small versus large. Its just somebody who put in the protections to protect consumers. Well, it is Important Information as people are doing their lastminute shopping. Stephen, we appreciate it. Thank you. Stephen bowyer from bitsite. Annual christmas lottery taking place today with a whopping 2. 4 billion on the line better than known as el gordo. The annual drawing has been dubbed the worlds richest sweepstakes. The catch, no one actually walks away with billions. And its probably in euros. So its not what it used to be. The grand prize is about 4 million before taxes. Still almost 15,000 people cash in on some kind of winning ticket. With many buying several tickets with the same number to maximize their potential earnings. Doesnt seem quite right. Thats 2,400 million. El gordo sounds like a tshirt youd get for eating. Like a hot dog contest. If you get 2,400 million to deal with, why is the biggest thing only 4 . Must be spread out a lot. We have some news coming in. Kellyanne conway has been named president ial counselor special adviser to president elect donald trump. Kellyanne conway officially getting a title in the Trump Administration at this point. She was moving to d. C. With her family. Coming up, the dow pulling back on tuesdays record high but within striking distance of 20,000. Well talk a possible santa claus rally after this break. I have access to the oil markets and gold markets. 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. Today i am helping people everywhere do what they do. Better. I work with startups like alpha modus to predict markets five times more accurately. I am helping tv networks use social data to predict what people want to watch. And i worked with marchesa to turn fan feeds into a dress that thinks. Hello, my name is watson. Working together, we can outthink anything. Will todays Economic Data push us over 20,000 . A look where to put your money to work now as well as 2017. Thats straight ahead. Plus is it too late to ship that lastminute holiday gift with just three days to go before santas arrival . A look at sameday delivery options for the ultimate procrastinators. And warm hats, warmer hearts. A look at Startup Company love your melon. Their hats are quickly becoming a huge hit across the country. And theyre donating millions to battle childhood cancer. Their story is straight ahead. As the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc. Im Kayla Tausche along with joe kernen and melissa lee. Were watching the futures this morning after getting very close to 20,000 earlier in the week. We did see a pullback yesterday and the futures are in negative territory if only slightly so. The s p would open lower by two. The nasdaq would open lower by six points. In an announcement we just told you from the trump Transition Team, Kellyanne Conway who successfully managed the victorious Trump Campaign has been named counselor to the president. In a statement trump said she played a crucial role in his campaign. Shes a tireless and advocate of my agenda, has amazing insights on how to effectively communicate our message. Im pleased that she will be part of my senior team in the white house, president elect said. He said conway will help him execute some of the Administration Legislative priorities. Kelly ann in her words said i want to thank the president elect for this opportunity. A Trump Presidency will bring real change to washington and to americans across this great nation. I am humbled and honored to transform the movement he has led into a real agenda. And didnt know what she was going to do or if she was going to do anything. She had said that she politely declined press secretary. But she was moving to d. C. We heard earlier this week. There was talk she would be running part of an external organization supporting trump. This is obviously inside the fold now. Yeah. President elect trump said im pleased shell be part of my senior team in the west wing where president martin sheen used to was he not really . Also president , michael douglas. Many. Yeah. Heres whats making headlines this morning. An entire week of data stuffed into one busy morning. 8 30 eastern time sees durable goods in the Third Quarter estimate of gdp and spending. Thats out at 10 00 a. M. Eastern time today. And also the index of leading Economic Indicators at 10 00. The u. S. Has put a unit of china alibaba back on the market place blacklist. The trait Representatives Office cede taobao. If you follow the tao i dont know many people would know what youre talking about. It sounds like a market, index. Were talking about taobao. Its not doing enough with the sale of intellectual property rights. Alibaba says its disappointed in that decision. One of this mornings big stock makers, micron beats estimates. Stabilizing personalized computer stock. 56 run up this year. Adding about 11 to that run this morning. Joe . And now to politics and the trump transition. The president elect is tapping carl icahn as a special adviser. The investor will work on rescinding what he has referred to as excessive regulation on u. S. Businesses. The Transition Team says icahn will not be a federal employee and not take a salary. Probably not a surprise. Well, the president himself is only taking a 1 salary because he has to. Also getting a job in the Trump Administration, the president elect is hiring Peter Navarro to run a new trade council. The group will be based in the white house. Navarro is the author of death by china and sharply criticized chinas economic and military policies and backs a hardlined approach toward relations with beijing. Switching back to the markets as we come to a close in 2016, cnbc is looking at ways you can make money in the coming year. This time were looking at the u. S. Markets. Heres bob pisani. Reporter stock rally, oil rally, everyones bullish right now but thats going to get tougher in 2017. Heres three predictions. First the stock rally will continue but hit major headwinds. The s p 500 will hit a series of historic highs again within the first hundred days of donald trump taking office. But that will be it. The problem . Market participants are anticipating much higher revenues and earnings due to tax cuts and fiscal stimulus. But the Company Guidance will not match those high expectations. Second, the oil rally will be a bust. As oil heads towards 60, america producers will ramp up production. That will keep the prices down and the discussion between opec and nonopec members to cut production will collapse. Finally, 2017 will be the year Stock Ownership expands. The American Public has seen declining levels of Stock Ownership for years. Only 52 of households own stocks and most is owned by the top 10 of households. But rising gdp will finally reverse those trends in 2017 and folk who is abandoned the market after the financial crisis in 2008 will return and start buying stocks once again. Wouldnt it be nice if more households actually owned stock . 82 of all stock is owned by the top 10 of all households. Ownership has become concentrated in a smaller and smaller subset of american households. Maybe this newfound enthusiasm for the markets will really translate into broader ownership of equities. Thats my wish for 2017, joe. Okay, robert pisani. Thank you. Thank you. How long im looking at you. Weve been together a long time, havent we . Maybe longer than our marriages, dont you think . I just did this 30th. All right. Okay. But you and i, 25 years now. Yes. Longer than my marriage. And i dont think we ever fight, do we, really . Well, youre kind of like my brother. I disagree with you sometimes but i love you too much to give you too much of a hard time. You know, you just gave i wasnt going to bring that up. Maybe we are going to fight. Whose predictions were those . Yours . Am i supposed to write those down . Why someone just sent in jeff bridges as the big lebowski saying thats just like your opinion, man. Why do we care about your opinions, bob . Theyre all mine. And we care about them because they ask me every year, bob, what do you feel . And i said, these things i feel strongly about. I wrote down seven, eight, nine, ten of them and eliminate them by elimination. Elimination. All right. Were going to watch and get more predictions now. So much for a quick surge over 20,000. The dow failing to top the milestone number once again as volatility drains from the market. Thats for sure. We saw the tightest trading range yesterday in two years. Joining us now phil orlando chief equity strategist at fed rated investors. In your shops, you start seeing not quite as many people around doing stuff. I mean, its a slow week isnt it at this point . Its a slow week, but our Financial Advisers are very busy. They only have a few more trading days to get things done in client accounts. So the Financial Advisers are around. Okay. Phil, if you got enough probably seniority and if youve got, you know, if you can go to st. Barts youre probably in st. Barts right . Tomorrows my last day. Im going to take some vacation time. Volumes are starting to slide and were expecting volumes are going to be light into the new year. Does that mean more or less volatile . I think the market has largely priced in what it was going to price in through the end of the year already. So coming out of the election, we thought the s p would respond for favorably and get to about the 2250 level and got there a couple of days ago. Were going to drift with lighter volumes. We get a correction. A lot of the enthusiasm, 20 up on the russell. You know, weve had a tremendous run here over the last six, seven weeks. And do either of you have big targets for 2017 or are you sort of playing it safe . You can raise it if it starts going up. Were at 2350 for next year and weve got a 2500 number for 2018. Weve already established if we get there in january to 2350. Then what . 2500 by the end of the year . Were mentally prepared for the fact we could be at 2350 by the middle of the year. Okay, joe. Our high end is 2700. All right. All right, orlando. Whap do you say to that . If everything goes right. Everything has to go right with taxes and deductions and everything. So theres an asterisk. Theres definitely an asterisk. Whats your lower Case Scenario . Whats your base . 1600. Because if everything goes wrong thats your range. And then around 2300. This is what they should be talking about and theyre not. When you hit a mild. Thats why its taking so long. Now, our tenyear forecast on the s p is 3500. Weve had that for quite some time. If you extrapolate that and put that on the nasdaq, youre talking about the nasdaq at 10,000 in ten years. It represents the digital era. Thats where innovation is. Those are the kind of things now that we should be looking at. 3500 by when . Ten years. What is that . 3 a year . No. You can get 6 or 7 per year. But this is the we should be much higher than 3500. This is the point everybody is missing. Were in a new market and nobody wants to talk about it. We think the markets can trend up for the next ten years. The only way you do that is on pessimism and skepticism. Weve been in a secular bull for three, four years already. Right. The average is 14 years. It started in 2013. But nasdaq just started this year because you just took out the high of 2000 and that took 16 years. That just entered a new secular bull market. More immediately, though, were going to be entering 2017 and i get the notion growth could kick in next year. Were certainly not going to see it in the results for the Fourth Quarter. What we might see, though, is the impact of the dollar and the higher dollar. Dollar index about 14year highs. We sort of saw that and by no means is a bellwether of any sort. It took down because of negative currency impacts. Should we be prepared for hearing about that in the Fourth Quarter . Earnings results that could be coming and could that be the hiccup in the market as we had this lull period between the hope of growth and growth actually kicking in again. So the earnings recession is over. We had seven consecutive quarters where we had negative year to year comparisons. The Third Quarter broke that trend. The Fourth Quarter is going to show more growth. Certainly the strength in the dollar is potentially going to have a negative impact on large cap Multinational Companies that do have more of their business overseas. The flip side of that coin is that small caps and the russell is up 20 since the election is that Small Cap Companies are doing 80 or more of their business here. And the strength of the dollar means that the economy is doing better and theyre doing more business. So it ought to balance out. You know, there will be a negative hit to earnings to large Cap Companies. Small Cap Companies are going to do just fine. Flip side of the same coin. Higher Interest Rates and higher dollar. But they both come from better Economic Growth. Exactly. And the higher Interest Rates are going to benefit the Financial Service companies. That could help us. Or hurt some. But its still so low it shouldnt be hurting anyone that much at this point. If we stay below 5 , our whole life its been between 5 and 10 , right . And over the history of the fed, a normalized fed funds rate is around 5 . I mean, were thinking that we get to 1 give or take by the end of next year. Were still thinking two hikes. And it used to be 90 cents right . Dollar euro may go to parity here. Right. Didnt it come out at 90 . And then they said were going to make this european union, its really going to work. Were going have the same currency. Its going to be huge. Its going to work and have no problems. Bureaucrats in belgium tell everyone what they can and cant do. Last quick question. The year of the small caps . Theoretically if theyre more insulated from higher dollar, maybe take a higher hit on Interest Rates but benefit more from Corporate Tax reform. Itll be small cap. Itll be value within value. Its going to be the financials and energy. Financials have been suppressed for so long that now that theyre out of the gate, theyre like roman candles. Theyre just going to go straight up. Nobody was positioned to be in them. So the leadership will come from the financials. Yield curve and no do dodd frank. Could be gone. All right. Thank you. Thanks. Merry christmas. Where are you going . Are you going anywhere . No. Were around. Were hosting christmas day. You want to host here . Im not working next week. Tomorrow is my last day. All right. That sounds so final. But youll back next year. Ill be back next year. Absolutely. I think so. I think so. We always say final words from our guest host. Scary. Happy holidays, merry christmas. Merry christmas. Coming up with just three days before christmas, is it too late to order online and have your gift arrive on time . A look at how companies are getting creative in order to have your presents get to their final destination. Thats straight ahead. And later their hearts are just as warm as their hats. We speak to the cofounder of love your melon. Their business is booming and its for a good reason. Take a look at yesterdays top dow gainers. Well be right back. Whats the value of capital . 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 generosity is its oyou can handle being a mom for half an hour. Im in all the way. Is that understood . I dont know what shes up to, but its not good. Cant the world be my noodles and butter . Get your mind out of the gutter. Mornings are for coffee and contemplation. That was a really profound observation. You got a mean case of the detox blues. Dont start a war you know youre going to lose. Finally you can now find all of netflix in the same place as all your other entertainment. On xfinity x1. Its just three days until christmas. Panicked yet . You should be able to order online for lastminute shopping from any retailer these days not just amazon right . Which retailers can get you gifts today . Courtney reagan is still working on her list and joins us from an Amazon Warehouse in new york city. Morning, courtney. Reporter hi, kayla nap is very true. Stores have been the answer for somebody like me who waits. But amazon prime now offers twohour delivery. That of course is if you live in one of the 30 cities where its offered and you pay that 99 annual membership fee. So yesterday in new york city, i actually used amazon prime now to start to fulfill the list from a charity wish list i got. Now, the selection is more limited than the full site but i was able to get almost everything from cook ware to tools. I placed the order just before 2 00 p. M. And we had a camera at the facility to catch the order being fulfilled which happened in eight minutes. Now, the earliest free delivery window was 4 00 to 6 00 p. M. While i wrapped over gifts, the delivery person left the facility around 2 45 p. M. And jumped on the subway with our items and came to deliver them just about 3 10 p. M. So say 50 minutes earlier than the window and just about 90 minutes after i ordered. He scanned the items and off he went with the big orange backpack. Many retailers are using modern day couriers for the last mile delivery. And shipping from their stores, target uses instacart. And walmart is still trying out grocery delivery but we havent heard on the progress. I did also try to fulfill the charity wish lists using google shopping express as well as macys. But neither one were able to get me those items on the same day. Back to you. Thank you, courtney. I feel like these things, though, are doing real disturbance to people. Because its enabling people to procrastinate and not get their work done. Although this year you have an extra saturday. You have a supersaturday. I think you thought about this. Oh, im done with all mine. Me too. Joe doesnt buy presents. I do. I buy one. The most important one of the year. Buy one. You know how that works. Happy wife. Happy life. Thats it. Coming up, our trading block is here to get you ready for the trading day ahead. A look at oil. Also millions of travelers will take to the roads and skies in the coming days. What to expect. Thats next as well. [weather reporter] governor has declared a Winter Weather emergency. Announcer soon, Insurance Companies wont pay for damages, that is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims, into one focused on prevention with predictive analytics. Helping them proactively protect the things that matter most. Get ready. Because were helping leading Companies Lead with digital. If youre getting ready to travel for the holidays, you might want to pack some patience. Its projected to be a record year for the number of americans heading out of town for the holidays. The nations Largest Travel Club aaa says nearly 11 million americans are expected to travel for the holiday weekend. People in the left lane with no one in the right lane at all just driving below the speed limit in the left like i have chosen this lane because i like it. I know lanes are optional and this left lane is the one i happen to want to drive my buick in at 45 miles an hour. Why are you honking . I think we need to update that vintage footage. 93 million are driving. Fueling those road trips. And you wont find relief in the crowded skies. Either aaa says the number of fliers will be up 2. 5 . It includes little babies and newborns for andrew over the last year. So where are people going this week . Some place warm mostly. That will be the whole planet eventually. Aaas travel agency says vegas, orlando, new york, san diego, and anaheim are the top five spots being booked right now. Apparently theres a tourist attraction in anaheim. Big one. Orlando too. But not as big as the other one. And universal studios. Why go to anaheim . Actually if youre in anaheim drive a little north and go to universal studios. And if youre stuck in an airport, you may want to try downloading super mario game. Mario run has set a download record topping 40 million in just four days. But theres a catch for unlocking the entire game. And that is proving to be a potential problem for the company. Nintendo shares are dropping in worry because gamers are balking at the onetime cost of unlocking content. The first few levels are free, but then to unlock the rest you have to pay 9. 99. The stock is now down 16 since the games launch last thursday. It was a big deal that this was going to be available on the iphone 7. That was supposed to be the big boost for nintendo. But maybe the Business Model is flawed. Coming up, a check on some key Market Metrics ahead of the holidays. Then it went from being an entrepreneurship class in college to a brand to battle childhood cancer. Well talk to the cofounder of love your melon about their budding startup. Into the break lets look at the futures. Dow looking ining to open 11 po lower stay tuned. 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. Among our stories front and center this morning, president elect donald trump has named Kellyanne Conway as counselor to the president. Conway has served as a Senior Member of the trump Transition Team. About 6. 4 million americans signed up for coverage for the Affordable Care act. That doesnt include automatic renewals and it comes amid double digit premium increases for many. A new study by trulia says about 40 of Young Americans were living with their parents or other relatives in 2015. Thats the largest percentage since 1940. Of course the year after the Great Depression ended. That trend has been steadily rising for the past decade. 2005, for instance, only about one out of three lived with family members. One guy on twitter said at least my daughter who is 23 has a fulltime job and is paying me rent. Not a bad thing. How does that compare to some countries in europe . Like whats italy . You hear about all the italian guys that are living with mom. And they might live there with their spouses. Some of that stuff is cultural. You sort of live with your parents until you get married and you buy a house or they buy you a house with your significant other. Its not necessarily all apples to apples. Doesnt seem like a great thing here. Seems like its a reflection of how tough it is when youre starting out nowadays. Student debt is a huge thing, right . Economic woes. But it will be different in 2017. Youre on your smartphone all day long, cant go looking for a job. Playing super mario or whatever. Pokemon go. Facebook, instagraming selfies. Snapping. How can i go for a Job Interview . Im snapping. So busy. Lets take a look at the oil and currency markets and bring in managing director of bk asset management. Also managing director of Clear View Energy directors. Institutional services. Kathy, ill start off with you. Were all watching dow 20,000. Is the equivalent euro dollar parity . I think its along 120 dollar yen. I think this reminds me of what was happening in 2015 this time last year where the u. S. Dollar was very, very strong. And everyone thought next year was going to be a continuation of the u. S. Dollar. The start of the year with the massive crash as a result of china. So this is a crowded trade right now. 20,000 long dollar is a bit crowded. So i would not rule out the possibility of a correction. Especially since january. We do see a lot of volatility. That could be something that rocks the market. We dont necessarily see the good data thats usually followed up with, you know, with the consequences of a stronger dollar. Jacques, i would imagine thats good for the markets to hear the Dollar Strength could be capped . I think with the oil markets whats really needed is a History Lesson on opec. Theres three steps to it. Opec promises to reduce production and they talk about it and oil prices go up. Step two, they continue to talk about it and oil prices go up. Step three is they underdeliver. Thats where were headed now as were starting to see points of supply rising in places like libya that can cause oil prices to go down. So what is what happens to oil immediately . When do we see that third phase really kick in . Youre really going to need to see a lot of data points. I mean, what were seeing opec is saying in nonopec countries is well start cutting production in january 2017. So were not quite there yet. But well start to see the data points roll in. Then whats going to happen is its going to come down to the opec meeting in 2017. Iuorio, whats going on with the vix and future vix in particular . I mean, yesterday we saw it hit its lowest level since august 2015. It was ten and change. Thats shocking. What are we anticipating further out in the curve . Yeah. The vix is telling us an interesting story. Remember the shortest vix is what is getting ground into the dust. What the vix is telling us is that the next couple weeks theres nothing really exciting. Now, the interesting thing that you mentioned is contracts, the second contract, theyre low. But not low by any means. So theyre telling us after things start to happen, things could be a little interesting. Thats what you see in the currency market as well, kathy . Perhaps a little sooner. Generally brings us significant volatility. It depends upon the presidency and how quickly they come out blazing with the stimulus package. I think in the start of the year there could be some profit taking. I think the dollar is still going to 120 against the yen. Youve got ton of elections in europe next year. We could get close to parity in the euro dollar especially if the elections dont go favorably. Theres a lot of risk next year. But what im worried about is those earnings. You always see earnings miss as a result. Regardless how many times this happens. I think that could really start to pull back stocks. And if we have a pullback in stocks the Dollar Strength though, when the dollar was strong the second half of 2014, it was because we were the victim of the ecb and the boj. Our policy was irrelevant at the time. They were so incredibly dovish. Right now were moving higher because of domestic story because of a Regulatory Environment and tax environment. Dont you think that matters . Dont you think the stock market overall can withstand a stronger dollar if its stronger because of the domestic story . Well, its only if the domestic story pans out the way that is promised. We may not, we wont get a lot of that stimulus until half year at the earliest. Its going to be more pain than gain. Youre going to basically see this translate. Were already seeing them reporting lower currency translations. So i think that perhaps youre right for the second half of the year, but we still have six months to go before we get a real boost in my opinion. Its interesting you mentioned iuorio were the victim of Central Bank Policy around the world. In effect were also sort of a victim of the weaker outlook for the if we take a look at the outflows, weve seen the largest amount of outflows from the youre row zone last year. Thats impacting the stronger dollar trade. Theres so much going on. You have the race to the u. S. Thats going to hurt growth. The stronger dollar is going to hurt growth. Weaker Global Growth that could affect the u. S. And any inkling of the need to pull money from the u. S. For whatever reason. Chinese collapse, the beginning of 2016 was complete surprise. Right. So there could be something that repeats this year. Iuorio you want to Say Something . I was going the say the weakness in europe which is ongoing, announced the bailout which i wanted to say that name. But the quasi bailout of that that shows they continue to push the kick the can down the road. That to me was 90 to 100. Can it eclipse. I dont think so. When it gets that high, i agree the fed might Start Talking about not being quite as hawkish to counteract those. When did you move out, jimmy, from mom . Its funny that you mention it. 35 . No. But when i was a kid, listen. Im still in the basement. But i grew up in a multifamily household where the grandpa was the pate ree yark, he was off the boat. But it was more cultural. Italian families did that. On our block there were like five italian immigrant families. It was because of economic reasons as well. But it was certainly i have a daughter who has a fulltime job and im deciding whether or not to charge her rent. Maybe you can help on that. Does she know that or she knows that now . She knows it now. Are you kidding . Shes 21. Shes not up this early. Thanks, guys. Little jimmy. All right. Some politics news. President elect donald trump meeting with Defense Company ceos yesterday at his maralago report in florida. The ceos including boeings and Lockheed Martins. Trump tweeted about the high cost of the f35 fighter jet program. Of course that was lockheeds. And the contract to build replacement air force one aircraft and that was boeings. Trump extracted a pledge from the ceo of boeing to keep the cost below 4 billion. Were going to get it done for less than that. And were committed to working together to make sure that happens. And i was able to give the president elect my personal commitment on behalf of the boeing company. This is a bis thats important to us. We work on air force one because its important to our country. Were going to make sure he gets the best ability. Once the requirements for the president ial plane is set, production is ready to start. When trump was asked whether he had secured concessions from Lockheed Martin on the f35 programs, he said it was too soon to know. When we return, millennials start up love your melon has given more than 1. 5 million to this is good news to fight against childhood cancer. Donating over 80,000 hats to children suffering from the disease. Do you know it yet . I dont. And this Holiday Season sales at the company are booming. Were going to find out all about it and the good works the company is doing. Were going to speak to the cofounder about the cause and their products as well after the break. Check out the futures at this hour. They are down a little. Meh. Thats a millennial word, isnt it . Totally. The Nbc Universal family is celebrating acts of kindness with the annual share kindness campaign. Inspiring others to give back this Holiday Season. Today were talking about a millennial startup thats committed to paying it forward. Love your melon is an Apparel Company that makes hats, beanies, and scarves and gives 50 of its net profit to organizations dedicated to finding a cure for pediatric cancer. To date the brand has donated more than 1. 5 million to Fund Cancer Research initiatives and family support. Lets bring in the cofounder and ceo of love your melon zachary quinn. What an amazing idea. Tell us how you came up with it and got it off the ground. Thank you so much for having me on this show. We started love your melon as a class project as a sophomore in college. That year we generated funds to give a hat to every child battling cancer in america over the next few years. Now this year we just set to hit 21 million in revenue. Were donating 50 of our proceeds to nonprofit organizations in the fight against pediatric cancer. To clarify, 50 of net profit goes to our nonprofit partners in the fight against pediatric cancer. So at what point did you know that you were onto something. And what do you think it was about your company with so many charities, with so many businesses trying to do good as theyre trying to do well financially. What was it about love your melon that made people want to get behind your cause . It was the first 200 hats we sold. We knew we had something big. We had to start a Business Class project. And we were competing against other class projects in our sophomore year of college. We set up a table outside of my parents restaurant. Theyre both entrepreneurs. And we started talking to complete strangers about this project we were doing to give away beanies to kids who lost their hair to cancer treatment. Everybody lit up about it. We sold out in two days when the teacher didnt think we could do it in a full semester. I dropped out of college and have been running it ever since. Not many class projects end up with 21 million in revenue. Or in sales. Well, weve had some great partnerships this year with shopify plus, facebook and instagram were one of the top advertisers. And what i attribute it to is authenticity. We create content every week whether its in childrens hospitals giving away beanies or with our nonprofit partners in the Research Labs or simply going out and getting people to wear our beanies when theyre skiing and snow boarding. We do three to four photoshoo ts a week. That leads to attributing sales and directly focuses people to our website. And you focus on direct to consumer. The internet is sort of your life blood at this point. How important is social media in getting the word out and could a company like yours exist and donate 1. 5 million to date to Cancer Research if it were not for social media . So far weve given 1. 5 million away. By the end of the year were giving away over 2. 5 million to our nonprofit partners. And it is a millennial generation has come up with this beautiful thing called social media. And being able to use it, we wouldnt be able to exist otherwise. Because were sharing immediate organic content, things that are actually happening in the moment with things like Facebook Live and other tools like Instagram Stories and sharing those pieces with people. Shows that its really happening, and its happening in the moment. And people then want to go purchase our products. Our apparel products from beanies to outer wear. All across the country. Where else could you see the Company Expanding to . As the name implies, you started with hats. But whats the limit . I think weve got a lot of work to do. I think we could do at least 50 million to 60 million in revenue next year. Thats going b to come from future partnerships. Were looking for a Retail Partner right now to launch in stores in 2017. And also looking to do cobranding projects. We were just on cheddar tv and those guys are asking me to make beanies for them. I think weve got to make a cnbc hat too. Where we have all the profits half of the profits still going back to pediatric cancer. But having this Creative Momentum that weve generated and creating awesome products for other companies all across america. Well, youre in the right place on cnbc to look for a retail and a cobranding partner with all of our corporate viewership. Youre based in minneapolis. You went to college in minneapolis. You think people in the midwest are just nicer . Do you think that helped you . Actually, our Fastest Growing market is in the northeast. It just surpassed the midwest. And then were going to be turning to the west coast. Because what we created with love your melon originally is we didnt go after a market purchasing beanies already. We went after a market of individuals that werent wearing beanies and decided to show them an attractive product they could wear to work, in the classroom, and other places. So now that weve tackled that new market, gotten these people interested in it, were going to be heading out to the ski hills, to skateboard parks in l. A. And selling beanies to people there and taking over market share in those places. Well, we wish you all the best, zach. And its going to be a busy season for you. And best of luck with a great cause. Ill send you guys some beanies to stay warm this winter. Definitely cold in minnesota so weve got to stay warm. Its cold in new york too. Zachary quinn, happy holidays. Good to see you. Thank you. A millennial doing good, joe. Millennials didnt really invent it but use it. Zuk zuckerberg is a millennial. People are happier when they get off of social media. Kelly evans is happy now. With some stocks you want to watch at the opening bell of trading on wall street, lets check the futures at this hour. Still indicated slightly lower. Also watching currencies at this hour. Not a whole lot of movement. 117 and change on the yen. Squawk box will be right back. Generosity is its own form of power. You can handle being a mom for half an hour. Im in all the way. Is that understood . I dont know what shes up to, but its not good. Cant the world be my noodles and butter . Get your mind out of the gutter. Mornings are for coffee and contemplation. That was a really profound observation. You got a mean case of the detox blues. Dont start a war you know youre going to lose. Finally you can now find all of netflix in the same place as all your other entertainment. On xfinity x1. Lets take a look at a couple of stocks to watch this morning. Red hat is under pressure this morning. Quarterly profits did beat estimates. Also announced the impending departure of chief Financial Officer in late january. Down almost 12 . Bed bath beyond fell 13 cents short of estimates. The home goods retailer also forecasts full year earnings that will now be at the lower end of the prior forecast as customer traffic has declined. And yum brands declared its first dividends of the china business. In other tech news, the u. S. Is returning taobao to its blacklist of notorious market places. This move against the Alibaba Online shopping site follows complaints from u. S. And interNational Trade groups. The groups argue taobao wasnt doing enough to stop fake sales. The levels of counterfeiting and piracy were unacceptbly high and posed a, quote, great economic threat. New details on a Hacking Group linked to the russian government in the Cyber Attacks against democrats during the u. S. President ial election. Cyber Security Firm crowd strike said the group known as fancy bear used a malware device to target between 2014 and this year. The intelligence gained from the malware was likely used by prorussian separatists to strike against the u cranians. Used in ukraine is to the kind used in the dnc. Bad news for eggnog lovers. The u. S. Is facing a major shortage of the holiday drink this year. Record eggnog sales led to major shortages all because the producers underestimated the high demand. I thought you were supposed to make your own. Eggnog sales up 60 over last year compared with 5 increases in recent years. Thats tough. It just looks like a heart attack in a carton to me. Thats not alcoholic there. Its usually alcoholic. You add your own i would imagine. It looks like egg beaters. It looks uncooked. Right. Or you would make pancakes out of it. Still to come on squawk box, the road to 20,000. Straight ahead. Plus Mohamed Elerian joins us to talk the fed, economy, and more. And at squawk box will be right back. fans cheering because when you really, really want to be there. But you cant. cheering at cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready. Because were helping leading Companies Lead with digital. Breaking news. Three key economic reports out this hour. Could the data push the dow to 20,000 . The trump transition. The president elect tapping a few familiar faces to cnbc viewers for key roles in his administration. Plus business in the cloud and the battle for innovation. Will tech wow or whiff in 2017 . Well open up cnbcs tech playbook as the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc. Im joe kernen along with melissa lee and Kayla Tausche. The futures have been there it is. Thats basically it. Thats what weve been looking at most of the morning. Slight drift lower. A lot of people already probably enjoying holiday break, you would think. Theres the 10year now. 2. 55 . Not a whole lot of movement in currencies either. Somewhere around 1. 04 on the euro. 117 and change on the yen. Three big economic reports due in the next 30 minutes. Weekly jobless claims, durable goods, and a final read on Third Quarter gdp. In corporate news, another wild trading session for the worlds oldest bank. Shares of italys monte de dei paschi trading was halted. Now a real estate bailout is expected without any force on to bondholders which you never like to see. Kellyanne conway has been announced as counselor to the president. Stocks to watch this morning, a mixed quarter for conagra brands. Revenues missed forecast amid an overall slide in sales. Company blaming itself effort to build a Higher Quality base. Company calls its performance solid amid a difficult performance by the extended process to be built by walgreens boots alliance. And nike habs added to best idea at guggenheim. That Market Expansion should take place in 2017. Hershey were watching that one as well naming new president and ceo buck has overseen hersheys expansion into other snacks. Hershey rejected a takeover offer from mondelez in august. And micron beat demands. Expecting Second Quarter earnings to come up well above expectations. That stock is rocketing higher by 12. 5 . Shares of actelion surging. It is now in exclusive discussions. Reports say the deal could be worth 30 billion. Mike rcron is unbelievable. It is. Its so volatile. For a commodity business. Over the years watching that thing, wow. Strap yourself in. And now coming back apparently. Now back to the markets. Joining us for the forecast for whats ahead, joe seidel is Richard Bernstein portfolio strategi strategist. Ed campbell. We got gdp coming out revised or whatever and durable goods. Even when there isnt a new president , we look at these sort of Rearview Mirror type numbers. So are they even less relevant for you know, when they come out today, any reason to even talk about them considering that weve got a new president and are looking ahead and wondering whats going to happen . Well, any new news is new news and its will impact the market. I think if we get good data today, we should reach it. And your thesis is that the deceleration that weve seen, the sluggish Economic Growth that weve been used to for years and years now that were finally going to break out of it. We think trumponomics is a game changer and could break the economy out of the lower for longer rut its been in postfinancial crisis. So we think we will get better growth next year. Although it does raise the risks for future years. And that it may be too successful at stimulating the economy. I mean, to go back to a time where weve had such significant fiscal stimulus this late in an Economic Cycle where its close to full employment, you need to go back. But the risk is that it does spark some growth that is above trend. And reawakens animal spirits and inflation and we get an aggressive fed. And that leads to a sharper downturn two to three years from now. But for now lets enjoy the party before we worry about the cleanup. So part of what ed just described and that is the economic backdrop has resulted in an earnings trough that we recently saw. So that any multiples that we look at, the e is depressed so everything looks expensive. But maybe multiples you dont look at valuations as being expensive now since its reflecting an earnings trough. Exactly. Your point just a second ago was about how with gdp data and other Economic Data is like people looking in the Rearview Mirror. People who were criticizing this market is doing the same thing. Looking in the Rearview Mirror and the point is the markets will always look expensive when your earnings are troughing. Always going to look the most expensive. So here were looking at sort of first and Second Quarter eps growth where, you know, by the end of the Second Quarter we could easily hit 20 to 30 on a year over year basis. If you just had not the actual price, if you look at the nominal one and use the numbers, its probably expensive. What do you think it really is . Real for whats it feel like . The realistic price earnings multiple given the earnings power . With Interest Rates still being relatively low, the pes ought to be higher than normal. Simply because, you know, its still obnoxiously cheap to go out there and borrow. They got another hike off, you know, this past here in december. They might get two to three in 2017. So, you know, with Interest Rates still being low, the valuations ought to be higher. So, you know, do you go back to something we all learn in finance 101 or econ 101. With your rate and pe ought to equal 22 or 23. I think thats probably a pretty good rule of thumb. You can remember . No. To the point, the e could get even bigger if we have more Corporate Tax reform. People dont have that in their models at all for 2017. At this point the shift in sentiment is so striking. Im in that boat too. That things have changed. There is a change here that will happen. But what is the thing that were not thinking about at this point . Consensus is now that things have changed. Yeah. And that is frightening. Its maybe what we and joe were talking about before we came onto the segment. The darker side of the trump agenda for Financial Markets is the antiglobalization rhetoric weve been hearing out of the president elect. Certainly the news weve heard this morning that theyre floating 5 across the board tariffs on imports, thats something that does not give me the warm and fuzzies. And, you know, i hope thats just talk and thats not something thats likely to result in real policies. But if that were to happen, if we were to go down that path, thats the case. And were talking about a risk scenario. You have Congress Getting sworn in on january 3rd. They have two weeks in office, theyre an extremely productive bunch. They have two weeks before the inauguration. What do you expect to see from congress which will be tasked with writing policy before the president even gets one in . I dont expect to see much from this lame duck congress. Especially with president obama still being president until the inauguration. But, you know would you look for any positive signs of progress . Where the needle is getting moved on perhaps the gops better way tax plan. Pencils back on paper. I dont expect much of in ig. Do you . We dont see anything wow. High bar. Exactly. We know from experience that we dont want to set that bar too high. Especially from, you know, from congress. I think our perspective is we can see two to three quarters worth of growth before we need any additional kickers from congress or anything else. That takes us to the second half of 2017. Before we need any additional help. One of the drivers here is energy and oil prices. If you think about it, the First Quarter, oil was still in the midst of a 60 to 70 decline. And it troughed in february of this year. 25, 26 a barrel. So if we go into if we average 50 a barrel of oil in the First Quarter, then were talking about energy being a huge contributor to earnings because Energy Prices will be up 100 year over year. So a lot of the comps in our year over year forecasts end up being pretty easy at least for the next two to three quarters. All right, ed, thanks. Joe, thanks. Thank you. So did you see you work with bernstein, right . Is he in today . No. Right. But not all week. Out next week . Yeah. The worker bees are here. Is he here monday . He was in monday. Tuesday . Tuesday. Now youre lying. No, no. He said when was his first day off . Wednesday . Wednesday, yeah. See. Its Richard Bernstein company. Sends the other guys out there. Joe zidle the brains of the operation. Ill be in. Youre in tomorrow . Im on vacation tomorrow. Im in next week. While bernstein is turning on the lights. Making sure our tvs are tuned to cnbc. Bernstein is somewhere on a beach, isnt he . Or the ski slopes. I knew it. All right. Thanks, guys. Coming up on squawk, a check on the tech cnbc playbook and get predictions for Companies Like google and apple ahead. Plus a deluge of economic reports on the agenda today. Well bring you the numbers and the market reaction. And later, less than one month until president elect trump takes office. Well talk trumponomics with representatives Gregory Meeks and sean duffy. Squawk will be right back. 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. Welcome back to squawk box. In corporate news, petroleum is striking a deal to sell natural gas fields and pipelines that they own in pennsylvania. Theyre selling them for 1. 2 billion. A buyer is a unit of houston based Energy Company alta resources. Meanwhile, yum brands is declaring its first dividends. It will pay a dividends of 30 cents a share. This is important. Stay tuned and listen very closely and write this down. It will be distributed february 3rd. To shareholders. And you have to be a holder of record as of january 13th. Mark it in your calendar. February 3rd. If someone sees the news payday. Whats the yield i would like to know. I dont care about those details. When do the proxy forms get sent out to see whether you want to vote on a different no, go ahead. Usually before the First Quarter. That was rhetorical. 2016 has been a wild year for the nasdaq and technology. So what trends do you need to be watching next year . Josh lipton opens his 2017 playbook for the tech sector. Reporter the nasdaq surged to new highs this year and 2017 promises more fireworks with dynamic gadgets and services and the ongoing cloud wars. First googles head is in the cloud. The search giant controls just 5 of the Cloud Infrastructure market. In 2017 google will double that putting pressure on Industry Leaders like amazon and microsoft. Second, trump doesnt scare cook. On the campaign trail, donald trump went after apple for manufacturing overseas. Saying he wants apple to bring iphone production home to the u. S. Thats not going to happen. The economics of bringing large scale low skill Assembly Line work back here dont make sense. Tim cook will counter that he already directly employs some 80,000 people. Third, that tech ipo pipeline heats up for the enterprise. Snap will make its public debut next year. But its the smaller enterprise focus startups that will dominate the ipo market in 2017. Okta, mulesoft, and dynamic will go public. They want to see the vendors before opening up their wall lets. Now, i know a lot of our viewers want to hear about the ubers and the airbnbs but these are companies that seem to have continued almost limited access to private capital. So its the smaller private enterprise name that you get to own in 2017 guys. Thanks so much, josh lipton, out west. For more on tech and the year ahead, josh is going to stick around. But lets also bring in Christopher Mims who recently wrote a piece titled why 2016 was a water shed year for tech. Water shed in what way . In five of the seven most valuable companies in the world right now are all Technology Companies. The top three are Technology Companies. And that value has brought with it more scrutiny from the public and various governments including my own. Is that because their core businesses are getting that much bigger and more monopolistic or because theyre diversifying and touching more sectors . Its definitely both. I think facebook is fast becoming what i would call the standard of media. Then you have Companies Like amazon which are pushing into just a breathtaking array of businesses. Who would have thought the same company could be dominant in cloud and nominated for an oscar as their media wing was this year. But these Companies Still act like theyre underdogs and they expect to be treated like underdogs. We saw that doesnt necessarily play out that well. I do think sometimes its funny reporting on these companies they have a persecution come flex. Theyre different from banks and bankers who are used to getting bullied by the press one morning and having martinis with them the next night. They do act like were the innovators and why would anyone criticize what were doing. I do give points to facebook recently for responding admirably to the fake and distorted news controversy. Theyre just starting to admit that theyre a sort of media company. How do you think tech gets treated under the new mvgs . Because for so Many Companies the changeover in washington is going to be the most closely watched item on their calendar. Thats very unclear. Because i think before the big tech summit with trump at trump tower and tim cook and a litany of other tech ceos, looked like there was a lot of attention and personal attacks by president elect trump on various tech company ceos, now they pledged to work together. Its possible that even seemingly mortal foes of trumps agenda like elon musk might be consulting with him through his peter thiel. Its not clear which direction thats going to go. I would be wary of anyone who wants to make predictions on that. Its interesting if you really hone in on the Stock Performance after the election of the likes of a facebook or amazon, theyre actually lower. You had mentioned elon musk. Tesla is higher. The day the ceo met with donald trump the stock started moving higher. Its going to be treacherous, right . What are some of the big issues, chris, that the Tech Industry will be watching and really pushing in terms of their agenda with the Trump Administration . Obviously the two are directly at odds on immigration. The tech sector has long pushed for more high skilled immigration. Another issue is of course subsidies for clean energy and clean tech i think in california when you add in the federal subsidies you get more than 8,000 in subsidy on your vehicle. And globalization is of course the biggest elephant in the room. If we get into any kind of trade war with china, thats going to be extremely problematic for companies that rely on china to manufacture their hardware. Quickly before we go, chris, any predictions for one winner, one loser to come in 2017. I think amazon is going to continue to win. In terms of losers, i think that apple if they continue to underperform their record quarters of the Previous Year could take a beating. All right. Well leave it there. Christopher mims columnist at the wall street journal, we appreciate it. Thank you. Coming up, game on. Forget super mario, well tell you how millennials are driving the board game boom. Its coming back. That story is next when squawk box returns. Welcome back to squawk box. Lets take a look at futures right now. And weve been sort of look. We popped into the positive in the Dow Jones Industrial average. So were up seven points now. Closer to dow 20,000. Today could be the day. S p is looking to open a little bit flat here. Nasdaq as well. Lets look at the dollar index. I should say the dollar trade across the board. Pretty much flat trade here going into this thursday session. Making headlines this morning, Berkshire Partners acquiring a significant majority stake in kendra scott design. The texas based Jewelry Company is valued at more than 1 billion. Sources say the deal will keep kendra scott as majority owner of the business despite being priced under a hundred bucks, scotts jewelry has been worn by Sophia Vergara and mindy kaling and has been on the runway by the likes of oscar de la renta. Board games are mainstream again as young adults look for a way to socialize with their friends. Global sales of games and puzzles hit they have to get out of the basement. They have to get out of the basement and board games are the reason. Do you think they do it in discreet and watch on a Conference Call . Do they actually leave and go be with people . You mean like facetime . They facetime board games . You have to shower and dress to go out and be with people. You dont have to. It depends what people you want to be with. Board games hit 9. 6 billion this year up from 9. 3 billion in 2013. According to Market Research firm euro monitor international. Year on year growth is expected to be 1 . Led to the creation of cafes and bars that are focused on traditional games. 30 of millennials now say they are interested in because they want experiences. Right. They want experiences. Thats it. See, you need to translate and help me with these things. Feel free to ask any questions to understand. Do you think monopoly people or life people . What about risk . What about scrabble . Maybe. What about stratego . I dont know what that is. Is that the battleship one . No. But what about battleship . Its not stategery. Risk is always cool. Chess is always a good one. Its hard. Its hard. Maybe not at a bar. Its an acquired skill. Too much thinking. 3d chess is worse. Coming up, breaking economic news. Well bring you the numbers and the reaction next. Lets take a look at the treasury yields this morning. Cracked 2. 55 here on the 10year note. As well as look at oil prices. And slightly lower trade on brent as well as wti. Youre watching squawk box here on cnbc. S my headquarters. This is where i trade and manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. 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. The market. Redict but through good times and bad. At t. Rowe price. Weve helped our investors stay confident for over 75 years. Call us or your advisor. T. Rowe price. Invest with confidence. Fixodent plus adhesives. Theres a denture adhesive that holds strong until evening. Just one application gives you superior hold even at the end of the day fixodent. Strong more like natural teeth. I thyou never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do, automatically. Imagine that. A world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready. Because were helping leading Companies Lead with digital. We are just seconds away from initial jobless claims, durable goods, and the final revision of Third Quarter gdp. The futures have turned positive. Rick, what are these numbers . All right. Third time around the block on Third Quarter gdp. Up 3. 5 so we enhanced it by 0. 3 . Thats even a couple of tenths better than expected. And if we go back in time, that would be the best quarter since the Third Quarter of 2014. Which then was followed up by a string of two handles. If we look at the price index, 1. 4 as expected. Same as last look. Consumption picked up 0. 2 from 2. 8 prths to 3 . Durable goods, preliminary. Its minus 4. 6 . That is in line or darn close to expectations. And its the mirror image of our last look up 4. 6 . But that increased 0. 2 . This is preliminary but it is a miss. However, when you strip out transportation, it goes up. It goes up to 0. 5 . Now, granted, 0. 5 isnt the same as our last look which was upgraded to 0. 9 . But its twice the expectations of up 0. 2 . Nondefense orders, exaircraft a proxy for capital spending. Also was up better than expected. It was up 0. 9 . But we could do better. And 0. 2 on orders claims 275,000. Thats quite a jump from 254,000. A bit unexpected in continuing claims. Moves from 2. 02 and change. To summarize, gdp no surprises. But it is a baseline. It is a little bit better. The real reads on preliminary, a little bit weak. And of course 20,000 watch looks like its going to be interesting again today. Dollar index unchanged. Rates in the mid250s. But darn close to the highest closing levels since september of 2014. Kayla, its all yours. All right. Thanks so much, rick, for breaking that down for us. Steve leisman is here also. With a bit of a closer read. What do you think . Good number on the Third Quarter gdp. Unfortunately its not being followed up immediately in it here. We had a good october and november number. November date has been squirrely. Its something to watch for the month. Not as good as if we were down at the 250 level. Looking at two numbers here which is the nondefense Business Investment up 0. 9 . Thats a good number. Well see if some of the new policies from the president elect might spur that. We use that word animal spirit quite a bit here. But good data could lead to better investment. Finally the other thing im looking at is the corporate profit revision here. It was up lets see what the number is here. Its been revised upward to 6. 7 . So there has been in the overall economy a turnaround in corporate profits. And i understand were in a hurry to get some place. Going to cut it off right there. Thanks, steve. President elect trump as weve been talking with a couple of appointments today, but one is announcing that Kellyanne Conway will serve as president ial counselor. She joins us now from trump tower. Its always great to see you turn down press secretary. I laugh at that. Who in their right mind would want to face the press corps in this administration . Seeing what weve seen for the past year or so. I think you were smart not to do that. You got any takers . Absolutely. Many qualified men and women have put in for press secretary. And i believe that announcement will come soon, joe, as well. That individual will do a fabulous job and im there to support the press secretary and the Communications Team as well from the west wing. Im sure that will be part of my portfolio. I saw that you likened is the to Valerie Jarretts role. I see her was one of the most powerful people for the past eight years. Almost a concierge for president obama. If youre likening your role to that, it will be an influential and powerful role. Ultimately for me its about impact. And thats just in service. I just the reason somebody asked me, you know, help our viewers here. Whose role would be similar. They mentioned Valerie Jarrett to me. I think whats most important is what your role ends up being for that particular president. And im there to serve President Trump however he sees best. Much more than the glory and the prestige. Youve got to have impact. Thats why it took me awhile to understand where i could help him best. I think outside the political structure is an important operation in terms of defending against what you just mentioned, joe. Which is a somewhat hostile press in some ways. But also ridiculous skeptics who refuse to even let him form his government and start pushing through his legislation. This man won. Hes the president. Hes a master communicator and master connector with people. Hes brilliant. Obviously successful man and thinker. Businessman and thinker. To help achieve the legislative goals. Its like any other workplace. You have to enjoy the people you work with to be effective. I have enormous respect for the senior team thats in place. Look forward to working with them. We know a lot of the cabinet already on this show. Very familiar with pete navarro for example and others. Now va potentially toby cosgrove. He runs a pretty tight ship at the cleveland clinic. Does that make sense . I heard that president elect trump was impressed with him. Toby cosgrove is incredibly impressive. I know they had a fabulous meeting in palm beach where the president elect is working nonstop. There are other people who are in the mix for va. Its an important appointment for the president elect. But he has made this such a center piece of his campaign in the middle of his presidency where hes way out there saying who are we as a nation if we cant take care of our veterans. And who are we if were allowing them to die waiting for care in the va hospitals. We just cant have it. Its flabbergasting. And he wont accept it as president of the United States. Its an important position. Were down to va and secretary of agricultural. I worked on a Blueberry Farm for eight summers. Our short lists for each of those have lengthened. Because the president elect continues to meet with qualified men and women who do a great job. Theyre just very different. He will make that ultimate decision, i expect those to come soon. After the horrific traj not even a tragedy, its a terrorist attack is what it was in berlin. The president elect said once again ive been warning about things like this and now you understand why some of the steps i79 to take. Some people went back to a total ban on muslims. But i assume what he meant and maybe you can clarify, i assume what he meant was extreme vetting of people who want to come here from areas of the world where weve seen wherever it seems like Something Like this might be more likely to come from. Those are the areas you would get the extreme vetting. Is that what he meant . Yes, that is correct. He has talked about that on the campaign trail. Youre against Hillary Clinton who wont even call them radical terrorists. I think Many Americans appreciate the fact hell at least start there and then just try to join with our allies. And even those that we dont work with that closely on other matters to come together and defeat radical islamic terrorism. He wants to have more extreme vetting in place in the country in places that harbor and train and e poxport terrorists. This is simple to understand. You go where the hot spots are. You go where the training is. You go where people are looking to bring harm and bring death and destruction onto civilized people in europe and the United States of america. Now germany joins france and italy and belgium in terms of being told this is the new normal. Brace yourselves. We dont want to hear its the new normal. In and around christmas and hanukkah and new years warning people about attacks. Or at least being vigilant about it. This is how many consecutive years in a row are we dealing with this . You look at the polls and people feel more safe than years ago. You know, the president elect has a very long to do list of things he wants to scrap and change in washington. Is Immigration Reform something that we should see prioritized in the first hundred days . How will you help him prioritize what he wants to start doing . If youre donald trump totally doable 100day plan. Talk about Immigration Reform specifically. You know, one of his Signature Center pieces of his campaign was to build the wall, start there that were a sovereign nation that must have borders and we must protect the american worker. In addition to that. If you look at the immigration piece of his 100day plan, you will quickly see familiar aspects you heard on the campaign trail. In addition to that, he wants to start the process of deporting these criminals who live among us. People who are here illegally who have committed crimes. Hes made it very clear they go. The gangs, the drugs. And he also wants to make sure that in addition to people coming over illegally that we stop the flow of drugs from over the border as well. So thats important to him. Hes got the tenpoint Immigration Reform plan. Anybody can pull it up and read it. You can agree with it or disagree with it but at least you know what it is. Road maps like that end up being incredibly important to him in this election. So very little has changed in terms of what he said in the campaign trail and what you see in his 100day plan. Kellyanne, its melissa lee. Since the president elect was elected, about 2 trillion has been added to global markets. Were calling it the trump rally. Im just wondering if the president elect takes credit for this big move in the stock market. And if the things that are spurring this rally, the hope, for instance, for Corporate Tax reform and Corporate Tax cuts specifically, if that is educating how he prioritizes the possible reforms we could see to the economy within that first 100day plan. Yes. Let me just say first youre right. Its great to call it the trump rally. The 2 trillion addition to the market cap and also the dow rallies that we see many times since hes been elected on november 8th. Youve seen the stock market react favorably. By the way, that is counter to what was immediately and sinisterly predicted would happen. Theyre quickly and sorely disappointed. The markets seem to like this. They know that theres job production coming. 25 million jobs. They know theres a Corporate Tax break coming. Capital gains coming. He promised them and even george w. Bush as president by june had pushed through his tax package. And it was a huge boom to the american taxpayer but also to his presidency. I would point out, too, because its relevant that president george w. Bush was able to push through his tax relief package in june 2001 with the help of many democratic u. S. Senators. Many of whom were up for reelection. Many of these elected officials, these senators, democrats, who are sitting in one of those 25 seats they must defend especially in the ten seats that donald trump just won, i have a feeling that they will make a list and check it twice to find out if they should be supporting this tax package. Its going to be very difficult for them to resist such Major Investments in the economies, such major job production and most importantly Economic Growth. You look at everything donald trump has said and you see this is a man who will not settle for any 2. 5 growth. So are you saying june is a good time frame for us to be looking for actual tax reform to be passed . Because thats a very aggressive time frame and that would probably be good news for the markets. I think we left them. We lost them. Is the lets see if we can get her back. Id like to hear the answer to that. Yeah. Most people say the end of this year would be the most likely. Goldman sachs says 2018. Right. Exactly. And so if were talking about when it will flow through to the bottom line. We might go to we talk about the markets more broadly here. Mohamed elerian former pimco ceo joins us now to talk the markets. Great to have you with us. Thank you. In of reforms and taxes, is that the number one thing that needs to happen on the fiscal side in order for these stock market gains to continue . This rally is push bid three things. One is as you say economic policies. Not just Corporate Tax reform. Infrastructure spending, deregulation. So people expect higher growth and higher earnings. You also have expectation for higher inflation which means you restore Pricing Power to the corporate sector. And finally money coming from abroad. Some of it, not all may go back into the markets. So its three different aspects. Thats what has pushed us in the rally. Your commentary is people are taking a look at the Dollar Strength and the dollar index being close to a 14year high. As a head wind to corporate profits. You actually say this could lead to protectionism as well down the road. Walk us through. My major worry is that the u. S. Moves on policies. And you know its never been an engineering issue. Its been a political implementation issue. The u. S. Implements but other countries dont move on their policy agenda. And the result of that is that the dollar continues to strengthen which then fuels protectionist tendencies. Keep an eye on the dollar. The dollar is going to have a big say as to where the stock market goes in 2017. How do you feel about the markets overall, mohammed . I think weve established a Good Foundation in terms of hope for better fundamentals. If we go from hope to design implementation, but i just caution the u. S. Cannot operate in isolation from other countries. And this stock market is going to need help from germany, china, and japan in terms of their policies. Well, i mean, when you take a look at appointments recently such as Peter Navarro, are you concerned we wont be getting that help because of the kinds of people the president elect is putting in these positions that will have direct contact with these hot point or hot spot countries you mentioned . So two issues. Overall, his appointments on the economic front have been encouraging. And these are people you know well. They appear on squawk a lot. They understand the functioning of the economy. Specifically on trade, lets see what he pursues. I think theres an argument for free and fair trade. You look at tariffs and below the question of currency to standards, to policy makes. And that is an issue that requires focus. Okay. Thank you, mohammad. Thank you. Kellyanne, i think youre back. Could it happen by june, because that would be bullish for people . Were talking about tax reform. And hopefully youre back with us. We just lost her again. How does that happen . Thats christmas bugs. Elves or something. I wanted to hear that. I did too. I also wanted to ask her for a diagram of the power structure. Youve got steve bannon, reince priebus, Kellyanne Conway, mike pence wow put pence on the level of joe has a diagram going already. I just wonder. And then the president elect trump obviously is on top of and youve got ivanka and jared. I just want to know the whole workings of the power structure. Coming up hey nicole. Hey i just wanted to think your support team for walking me through my First Options trade. Well, were all about educating people on options strategies. I wont let this accomplishment go to my head. Get help on options trading with thinkorswim, only at td ameritrade. President elect trump will have a full plate when he takes over the oval office next month. At the top of his list is obamacare, and whether you repeal and try to replace that, theres tax reform, war on terror, regulations. Joining us on now with more, congressman sean duffy, who serves on president elect trumps Transition Team, executive committee and onset with us congressman greg meaks represents the great state of new york. I dont like saying that, congressman, because theyre all great. Every state gets that adjective. I think it is true. Great state. And the city of new york is great. And its so great, in fact, they have to name it twice, new york, new york. I thought it was named after the song, new york, new york . All right. Im telling you before i unleash congressman meaks on you, congressman duffy, tell us what you think the priorities should be for the new administration, and then im going to let him go. So just get ready. Well, i hope congressman meaks is in the Christmas Spirit and goes light on me this morning. So, joe, you hit it right out of the gun here. Were going to do tax reform, were going to do a repeal and replace of dodd frank im sorry, were going to do dodd frank, need democrats to help on that, but obamacare as well. Theres going to be a drive to secure the southern border, whether its a full wall or partial fencing. All those things that donald trump had talked about on the campaign trail that the American People bought into, were going to try to get done. I think its key to note that were going to need some democrat support though and help. So theres going to have to be a bipartisan conversation about what the country wants, and what both sides look at as priorities as we work through tax reform, and health care reform, to make sure we can get these packages not just through the house but through the senate because as you know you have that 60 vote threshold in the senate. And theres only 52 republicans. So eight democrats as kellyanne mentioned who come from red states that donald trump won are going to have to get on page and help us out. Yeah, we need a new list of red states because they arent you know, they werent the red states we were used to. Thats right. But they turned red this time. Congressman, you know chuck schumer. And there have been, i dont know, some rumblings that maybe hes got a relationship with donald trump and that maybe hes going to be willing to play ball on some of these issues. Do you have any inside info on that . Would you tell him to do that . Or would you dissuade him from doing that . Listen, i think that the current president has said we want to see donald trump and anyone whoever is the president of the United States to be successful, however, weve got to look at what policies theyre putting forward and make determinations from there what we do. And thus far it is hard to figure out exactly what donald trump will or will not do. Because if you go by the campaign, some things hes rolled back, other things he has not. You talk about tax reform, you talk about, you know, for example i think that folks can look at tax reform, but theres got to be are you talking about just stripping government completely . Are you talking about finding additional revenue . Are you talking about hurting the middle class . Are we removing all of the social netting for seniors and others . So the devil is always in the details. And were not sure what donald trump will propose. If you go over his record from the beginning before he was running for president , if you listen all through the campaign, hes been all over the place. So we dont know where he is. Lets single out one thing. Congressman duffy just talked about dodd frank needing democrats help to actually roll it back. Youre on the Financial Services committee. What would you be willing to detract or delete from dodd frank currently . We have to always talk. Theres always been talk in regards to theres no perfect bill. Theres never been a bill thats been passed that is absolutely perfect. We have always been ready to look at unintended consequences. And fix various things that are unintended consequences. Im not negotiate those deals here. Which id like you to. But what we dont know is we dont want to eliminate dodd frank. Dodd frank has done very good things. And to talk about just repealing dodd frank is not the way to go. So democrats will stand to protect dodd frank. But if we can do certain things that can make it better, that could eliminate unintended consequences, democrats are willing to be at the table. The problem has been is just the same thing with obamacare is were just going to end it, not try to figure out what we need to do to make sure it works in a better way. Congressman duffy, how fast can tax reform get passed . That is one thing the stock market has risen to records on the hopes of. You know, in the first 100 to 200 days i think we can, you know, realistically get tax reform done. As you know its a complicated code. Theres a lot of interests of people who care about what tax reform look like. We want to make sure were listening to those folks. But i think with all the work we have done in the house, you know, this tax reform package has been worked on, you know, for four to six years. So theres a lot of ideas, a lot of the groundwork has been done so we can move relatively quickly when we decide to go. Thats a positive is it a 2017 thing on tax reform . Absolutely. Absolutely. Again, the devils in the details. I want tax reform, but i want to make sure theres also revenue and that donald trump, if he should fix you know, we havent seen his tax, if he can fix and make sure people like him are paying their fair share of taxes, then we can go get some things done. All right. Gentlemen, thank you. Maybe we will. Maybe we will. Congressman duffy, good to see you again. Merry christmas. Congressman meeks, merry christmas. We want to talk with the millennial board game. What . Some of those games theres a winner. Everybody can get a trophy no, out of four people you can be fourth place. Anyway, this mornings biggest movers. [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. 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. This is my retirement. Retiring retired tires. And i never get tired of it. Are you entirely prepared to retire . 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. Lets get a final check on the markets. Futures had turned positive. Now youd have to say theyre basically flat, red again. The dollar well see 1. 04. The yen 1. 17. Oil actually was a little bit higher earlier, now its actually down 52. 38. So you guys like participation awards . Uhhuh. Everyone gets a trophy. Or a ribbon. Or a medal. You can have fifth place in monopoly if you finish last. Of five people. It worked for the millennials because we certainly dont want to trigger everyone. Were all winners today. I think thats what we can take away from this. And one more day before christmas break, make sure you join us tomorrow, squawk on the street is next. Good morning and welcome to squawk on the street. Im david faber along with jim cramer. We are live from the new york stock exchange. Carl quintanilla has the day off. Lets give you a look at futures right now as we head into the trading session, a half hour from now. Not much, not much going on there. European markets you ask about and i will answer. And will i get no, i didnt get spain and italy. Come on, guys. All right. But there it is. You ca