Transcripts For CNBC Squawk On The Street 20161114

2016. Our road map begins with a trump rally set to continue. News of white house appointments, his 60 minutes interview, takeaway for business and markets. Plus, we have a big deal in technology. Samsung is buying harmon for 8 billion in cash. It makes the south korean giant a major player in the connected car. And apple caught up in some geopolitical rhetoric. China said to warn the United States about a potential trade war. And why that would affect iphone prices. But first, the election in effect, the focus, dow poised to open higher as it continues its march towards 19k after coming off the best week since 2011 gaining more than 5 . Bond yields continue to jump as the prospects of Infrastructure Spending during a Trump Presidency increase Inflation Expectations. And that 10year yield, jim, is pretty much all people can talk about. Im looking at that now and its why. You see a bank of america go up in tape early morning, that makes sense. Remember, theyve got this gigantic deposit base. When you have the banks move people say why ever own a bank and the answer is theyll be a period, usually a 72hour period where they will put on a level of valuation that has to do with rate hike or Interest Rates that will be so much bigger than what you get from a fang that itd take your breath away. These stocks have so underperformed, bank of america is now premium to book value. There was a very nice upgrade today of citi, morgan stanley, they got a 64 book value. The stock is low 50s. So these have a lot of room to run. The more you see that Interest Rate go up, the more you can justify paying more for the banks. Its not multiple expansion, its actual raising the earnings per share. 20 of the banks, 20 above the 200day move average does not happen a lot. No. So to what extent are they overextended . And are bonds due for a tradeable bound this week . Overextended i will tell you, no, i dont think if you get some more appointments, if you continue to get momentum out of the white house, then i think youll just say, listen, weve got the rates going to go back to where they should have been especially if we find ourselves in a situation where every day he comes out and says, look, were going to get rid of this regulation and that regulation. Now, you did walk back some things already because it looks like hes more center oriented on immigration issue or Affordable Care act from last nights 60 minutes. But the banks have this gigantic overhead that has to do with the fact everybody monitors everything. And they have giant legal bills. Those numbers go to the bottom line. Youll get tremendous Net Interest Margin expansion and the next thing you know you have banks earning say x and theyre earning x and a half or 2x. So you get the situation where j. P. Morgan is up to where it should have been a long time ago. If we thought the rates were going to go up. Right. And rates are also expected to go up in december when the fed actually moves. Right. Now you want fed speak and you want them to say, yes, were moving. I was looking at how many fed speakers oh, my gosh, i have a tally. Everyone speaking unison so j. P. Morgan takes out right. Perhaps one of the more surprising things that occurred as a result of the election was this incredible move. Right. Which no one saw coming. Which no one saw coming, to your point. It has had some dislocating effects though in terms of equities, i think, where there are some companies or there are some Industries Even that are impacted differently than the banks. In the opposite way youve had hedge funds lightening up, taking risk off, some saying last weeks losses in some of the Big Technology names were a result of responses to that higher rate picture and then riskoff trades because they werent appropriately hedged at a number of funds. Yes, i mean, look, if you have inflation, all those really high growth tech stocks are really valued on an inflation list world. Now, everyone got thrown off by nvidia because nvidias quarter was so unbelievable and it was Machine Learning and it was gaming, it was artificial intelligence. And the stock got crushed. No, nvidia sorry, right. But that didnt have any legs. Right. That was incredible. I would have thought that moved up all it did was just stop the decline. And a lot of it was because nvidia is what intel was like in 92, 94 where every 86 would come out and you would say who needs that, puts a man on the moon. The answer is you just upgrade it. You upgrade it every time. Oh, what do you have . I have a 386, then pent yium oh, better get a pentium. I would tell you that nvidia is the company that thought the most about artificial intelligence, Machine Learning, has the right chips for it. Very smart company. But were talking with last week google, you know, was 7. 85 headed down 754. And yet they get the big repatriation gain. They do. Facebook didnt have a particularly great time of it. Apple there were two sides to that story. Yeah. One being what will happen to iphone manufacturing, is there any chance that the trade war with china potential. Right. Offset by 237 billion, some of which could come back. 35 per share on the right taxable base. You know, i had three i talked to three major restaurants ceos just last week and they said people were back. They were back wednesday, thursday, friday. I think its hilarious because netflix should be down. You know what i mean . The stay at home economy. Watch kroger to see if that gets hit. The stay at home economy had gotten deeply rooted because people were feeling badly or staying home watching, and a lot of the i mean, i had sheryl excellent executive for popeyes, boy, business picked up here. Sort of flies in the face of the divisions were seeing in the streets. Big topic with trump last night on 60 minutes, does that count for nothing . True. I think theres a sense of unfortunately two americas again. I think part of america that was hunkered down and feeling gloomy that this race never ended. And then theres part of america that is based on who won and lost, and theyre different. Theyre different. You might want to just go out because you feel relieved, just like there was a big relief rally on wall street. I think people got very beleaguered by the election. Doesnt matter who you were for. The election just went on too long. Now, theres some people i find when you go out some people are out because they say, boy, i feel good about things. Other people were out because they feel bad about things. But everybody went out. Yeah. What are things looking like at bar san miguel . Do you have a lot of people coming in brooklyn drowning sorrows . You know, its interesting to say about bar san miguel, you hear about people drinking beer more when things are like that is a neighborhood where the block next to them had a giant tv thats closed the street just to be able to watch the election results. And i dont think that they thought the results were since brooklyn was the headquarters of hillary clinton. Yeah. I dont think they stopped the street because they thought it was going to be a big trump victory. No. Although he outperformed romney in brooklyn by double digits. Yeah. Really . Maybe thats why we did good. A very large borough. A lot going on in brooklyn. How about the constellation theres a lot of other parts. People decide because they import beer from mexico constellation a big loser last week. I know they did. That stock got hit hard. Hard. And yet i think its very fun n they had an Analyst Meeting the day after the election and people thought they were the most vulnerable stock after trump. Guys, youre not going to slap a gigantic tax on beer, but maybe if nafta goes, how much would it cost for beer to come in . I know. But these are things people are starting to think about the same as they think about for example the 3g guys in brazil and the days they do, or abi, which is a brazili brazilian dutch controlled company, what is the likelihood these kinds of Companies Made a living off of buying u. S. Companies and cutting costs, ie also jobs, whats their future going to look like under trump administrati administration, trump antitrust administration . A samsungharmon where theyre keeping all the jobs. I got a lot on that in a minute. As do i. Shoot, youre the real reporter here im told. I dont know. Well see. Ill bring my stuff, you bring your stuff. Ive come to play. Ive been on it since 3 30. What time did you start . About 6 30. A threehour jump. As we said earlier president elect beginning to form his inner circle as he names senior staff and strategist, our washington correspondent john harwood is in d. C. With the latest. Hey, carl. Everybodys trying to figure out after all of the talk of the campaign what the Trump Administration is going to actually do. Is he going to be the deal making businessman with a hint of pragmatism that weve seen at some parts of his career, or is he going to be the guy who appealed to white voters in very provocative ways . Now, the apointdment of steve bannon and Reince Priebus didnt clear up that mystery. On one hand democrats took the comfort of appointment of priebus because hes tied to traditional politics, the rnc chair, close to paul ryan, and republicans took comfort because he is tied to ryan and the policies that paul ryan has favored. Lesser government, lower taxes, that sort of thing. Reince priebus said this morning on the today show the Trump Administration was going to be a partnership. Weve had a great partnership. And ive learned to get to know president elect trump and steve bannon and the whole team. And, you know, it has worked and it has been a great partnership. And he really wants everyone to understand out there that he wants to be a president for everyone. Right. No matter your background, your race, your gender, your faith. He wants to do well for every american across the board. Now, people in both parties were less comforted by the appointment of steve bannon as chief strategist. Yes, bannon has worked on wall street and in hollywood, but he has made his name as the leader of the Breitbart News organization website. Hes called for a worldwide populist revolution. He calls himself the champion of the socalled altright. Others use terms like White Nationalism or white supremacist. And you see the chief strategist for john kasich, the ohio governor, a rival of trumps in the primary tweeted out after that appointment that the racist, fascist extreme right is now steps from the oval office. This is a indication that the internal divisions within the Republican Party remain. And donald trump has got to figure out how to overcome them. Everybodys going to be watching similarly for the president elects appointments on National Security, state, defense, National Security advisor. And until he actually takes office and actions replace words, thats all we can do is try to parse the appointments, guys. John, the journal goes with the anecdote that the Trump Transition Team was unaware that the white house staff needed to be hired in the west wing. Does that seem believable to you . No, actually. There was a comment that jared c urve ushner made, i believe, used to illustrate that idea. As he was touring the white house how many of these people remain. Im pretty sure that donald trump and his team understand that all of the important strategic positions in the white house are filled by them. Yes, there are some people, stenographers and career Civil Servants who will remain in the white house, but i would be extremely surprised if they didnt realize that. John, well talk to you later this morning. A lot to cover today. Our john harwood in washington. When we come back, samsungs betting on cars by making its biggest acquisition ever. Were going to talk about that. Also ahead former fdic chair sheila bair. Take another look at the premarket. That move by the dow has propelled it into first place of the year now up 82 versus the s p up 59. More squawk on the street from post nine in a minute. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive Harmon International soaring in the premarket. Samsungs agreeing to buy the Automobile Technology company for 8 billion in cash making it the biggest ever overseas acquisition by a south Korean Company. Samsung says the deal will give it a significant presence in the rapidly growing market for electronic cars, a name youve been pushing for years, jim. I went through and did a Google Search of how many times i said they should buy harmon. It was embarrassing because every one of the listings was cramer to harmon, apple should buy and the ceo was i think tired of me saying that apple should by harmon. The idea was that car play is not powerful enough. You want to be the center of infotainment, yes, Cyber Security in Autonomous Cars, they spent a lot of money on that. And everyone thinks theyre good speakers, jbl, wood stock, and no this was a company that decided to use that as a way to break into the connected car to make it so and we have dinesh, he emailed me early. He will be continuing to run this company and the 30,000 employees that work for and under him as a unit of samsung. But if youre a harmon shareholder, youre just getting cash. So there are benefits so samsung but youre not going to take part in them. Youre getting your 112, which jim, is well below the alltime high in 2015. It is about ten times ebitda. Im told by the way by people close to the situation when you read the background of the transaction, when the proxy comes out youre going to see at least they were certainly aware of other potential deals that might be out there. That was just me. And chose to go but to your point, samsung is doing the biggest deal theyve ever done. And im told they were working on this or thinking about it, i should say, for as much as a year working on it at least in terms of talks since the summer. Yes. Apple has not been willing to go there. Still not that big for a company as large as samsung. But it is by far the largest deal theyve ever done because they see the evolution of the car similarly to the way they saw the evolution of smartphones over the last ten years. And were at the beginning of that. Think about whats happened the last ten years from where we were. Theyve got 1,500 worth of intelligence, internet of things in a car. Now, i went to theres a ring of i know im possessed by mexico and nafta, but theres a town adjacent to me which has a new airport filled with mostly germans and japanese coming in because theres a mercedes benz, lexus plants, a lot of all the high end. Every single german and japanese high end is made there. And whats in the center of all the plants in a ring, harman. So they are there. And one of the things dinesh taught me is you had to be original equipment manufacturer and they had to be right there and just in time so all the cars are made right there, put on Union Pacific. And you dont know whether you bought that car from the United States or from mexico. Right. And its been a huge windfall for harman. I should say the 30,000 harman employees are not in the u. S. No. But that figures with an income K Administration very focused of course as we know keeping jobs here and bringing them back. Youre going to have to look through that lens at any deal that involves a south Korean Company buying a u. S. Company. Yes. And ive asked the question, of course immediately the answer is samsung has 24,000 u. S. Employees. Will it require a review . Yes, is that significant . Probably not from a National Security standpoint. But these are interesting things were going to certainly have to start thinking about. Siemens buying graphics today, another deal today. Actually, weve now set a record for asia pac acquisitions of u. S. Companies. It is amazing. But ive got to tell you this, harman, people really misread it. People didnt understand dinesh had turned this company into the brain of a car. Oh, car plays great, put your apple in no, these guys are integrated into all of the electric, everything all of the things that, you know, by the way, collusion avoidance, and their last acquisition was to be able to block have Cyber Security make it so your Autonomous Car is not hacked. Lots of good reviews on that. Are they getting the company cheap . Harman missed a couple quarters. Harman had very big russian exposure and you know russia fell off a cliff. Thats an interesting story im working on that about the revival of russia if theres more normalized relations because it does seem if the germans want to school trump about how europe works, he will school them about russia and germany. Wasnt it faber who said russian assets are the most obvious trade here . Ive been working on that piece. Darn. I have like 72 researchers on that. No, actually, i have ben and molly so back to harman and the price. 112 too cheap . First remember they were going to go private, that deal fell apart. Way back before the financial crisis. Then harman was one of the best performers in the s p and it stayed right here. So youre getting back to where actually a little bit lower than where we traded, but it cratered on several quarters and it was dinesh spending. You know we always say you want to get your stock lower you invest . This man invested so much to make his company a car company, not a speaker company. I saw my jbls from when i went to college. I think its interesting. Hes still going to claim theyre delivering value and they are, without a doubt. But he keeps his job. And you think its done . You think that that 110 doesnt i dont know. Is apple going to jump it . Its a regular break fee im told 2 to 3 . I was on my knees asking them to even consider. You should see theres like a video that just says please, please, please, please, i was like a little boy and thats how they regarded it. A little boy. We got to go. Lets take a break. Well get cramers mad dash and countdown to the opening bell in a moment. Whether its connecting one of the worlds most innovative campuses. Or bringing wifi to 65,000 fans. Businesses count on communication, and communication counts on centurylink. 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 lets get to a mad dash for this monday as we head towards the opening bell. Where are we headed . We didnt talk about retail had a major break outlast week. Add childrens place to this list, bank of america goes from sell to buy. David, you know when they do that twist of doubles that usually means theres something about to happen. Jnl done a miraculous job here. John dusk en, old friend of mine, did a little what i would say saber rattling, the activist kind of thing, but didnt matter. She delivered numbers with or without, maybe some say with. But, david, this one has never been bad. And now its about to accelerate. This is a mall winner in a world where there are so few mall winners. William sonoma by the way downgraded. What are they doing thats working . Style. Design. Really . Yeah. Style and design. Bank of america says the new design guy was actually referenced as a reason why you want to own childrens place. I want to own childrens place because look at this one. 68 price target, goes to 92. Theres a guy catching on. Right . Theres a guy getting on the boat. Unlike j. P. Morgans matthew boss who was like 5 for 5 last week in terms of his numbers. Some of these analysts have distinguished themselves. Some have. Some have. We got an opening bell for you on this monday in just a few moments from now. Stay with us. Squawk on the street coming right back. 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. Youre watching cnbcs squawk on the street live from the Financial Capital of the world. The opening bell in under a minute. The dow begins the morning 26 points from an alltime high which was set on thursday. The s p is within 1. 2 of an alltime high, on track for the best year since 2014. Jim, the 10year and the 30 both at highs for the year at 2. 30 and 3. People wanted to see economic activity. They sure think theyre going to get it. Ryan detrich, s p 500 was up 3. 8 last week going back to 2012, but up 3 the following week has been green nine out of nine times. So dont sell yet. Dont sell yet. Theres the opening bell and s p at the bottom of the screen. At the big board today its the womens entrepreneurship day organization. And at the nasdaq dexcom, maker of continuous Glucose Monitoring systems for people with diabetes. And there we go. Alltime high on the dow at the outset. Only needed 26 points. We got 40 in the first couple seconds. Wow. Well, look, its funny dow filled with all these companies that are Trump Companies so to speak, whether they be the banks or giant infrastructure plays. Ill tell you whats interesting is everyone decided the airline and travel business will be back too. Those have been incredible performance. People feel that the trains are going to be back because of coal. Now, we did have a weak finally where natural gas spiked a little because it got cold. Natural gas has been coal hasnt been that competitive, but this coal rally, which is therefore a railroad rally, take a look at Norfolk Southern and these rails. You had the airlines and the transports and the financials leading. Wow. People love that. Theres not a lot of new money coming in the market. Maybe that changes. When does tech get interesting from a valuation standpoint . I think that you know, if it didnt get interesting after nvidia, i dont know whats going to get interesting. Maybe Analog Devices when they report in a couple weeks. I think apple a lot of people just feel like apple suddenly the battleground for china and theyd rather buy bank of america than they would buy any of the techs. Fang, i did a piece about how fang was defanged by this rally. It really has been. A root canal i think. It has been for sale as there seems to be this rotation to, i think, i guess freeportmcmoran, copper had the big rally, their earnings go from loss to gigantic remember, people care about the magnitude of the switch. Sure. So facebook was going to earn what it was going to earn no matter what. But you get a company like boeing, if people feel its animal spirlts can get rolling. Although dollar index now over 100 is the highest since last december. I know. When do we start having conversations about the dollar again . Well, i know that a lot of the Consumer Products goods stocks got hammered last week and they were viewed as weak dollar plays. Gold hideous because Interest Rates going higher, utilities terrible, Consumer Products, good stocks, bad, tech depending on whether it was secular growth which they hate or cyclical tech they can put a bid under, western digital, micron, and then theres the banks and industrials. Youre right, the industrials should be trimmed, but i think theres a sense, guess whats back . What . Brazil had great numbers last week. And theyre running gms runnirun ing plants around the clock. Yep. Russia could come online because i dont want to call friendship because ill get in trouble, but putin and trump may see more eyetoeye than merkel and trump, maybe. India, they are now making it so you cant have large bills. You got to redeposit money in the banking system. Tim cook making big move in india. And chinas numbers have been strong. So i put together this acronym and its called crib. China, russia, india, brazil. Start with c. R. I. B. All right. First you dont walk and then run, you got to crawl. So were back, were in c. R. I. B. Which is much better than bric. We dont even use bric. But c. R. I. B. Because its coming back. Its in the crib. But david you know what happens after youve been in the crib for awhile . You get out. You go over the side. You crawl. And next thing you know brazil is on fire and we are back in a world where india may be trying to rival china. C. R. I. B. There was some guy at goldman came up with bric. I think c. R. I. B. Is much better. Fa. Yeah, a long, long way to go. I have got this thing down. C. R. I. B. And i think harman fits in c. R. I. B. You do . Im trying to figure out when mexi mexicos going to come back because that doesnt seem yet. The peso has fallen not quite as dramatic as Election Night but has not rebounded dramatically. The money is going to come out of fang and into crib. Just like that. White fang no. Okay, when you were in a crib too young to watch i was, but lirned abo edlear from you, i know what it means when you make those noises now. Probably most famous in philadelphia, were a town challenged for famous people. Celebrity challenged. Celebrity challenged, soupy sales may be our biggest. Theres got to be others. Will smith . I dont know. Can you think of some . Youre the philly guy. Clark . A guy i know from queens whos now going to be the president. Just saying. Suddenly he goes from very proud of his borough. You were always a royal, david. You were always a royal from queens. Thank you, its true. Now its like you got the whole but i dont think the secretary treasury stays. No. Its a new queens resident. Yes. Its going to be an allqueens cabinet, maybe icahn can join, queens across the board. Is queens traffic going to be as bad as midtown traffic . No, in fact 57th avenue will continue to be a nogo area. Ive taken the subway more in the last month. Only that or city bike. Or walk. But you cannot get a taxi or uber or anything you cant. Thats not going to happen. Today, citi lifts a bunch of retailers and Department Stores on the hopes of both corporate and personal income tax cuts. You got urban, gap, cokohls, everything on the upside. Terry lundgren told the story of starting to get very easy comparisons. There was a good story about how hil dprks igers having good numbers. Those of us sat down and looked at taxes under trump. Yeah. Ordered that kitchen redesign. There you go. Spending. Shes been wanting to do that kitchen for the last eight years. See that . Didnt know that was coming. Home depot i think is going to harold tome is the best cfo and shes going to be on that call and tell you about more household information, shes going to give you a tale, i believe, which says theres still going to be spending for homes which a lot of people felt hasnt and fang is going to go there too. Fang is hurting. Mentor graphics not hurting up 18. 5 on this deal to be acquired by siemens. 37. 25 a share in cash, about a 21 premium to the prior close on the company. Stock price represents about 21 times 2017 estimated earnings for this company. It does appear to be a bit of a premium at least to the rest of the group. Take a look at cadence design, take a look at synopsis if you want comps, both of which are up also. Not nearly as much. Right. As is Mentor Graphics. But also interesting theres a pace of m a activity that is quite significant. Incredible. I continue to talk to a lot of bankers and lawyers who make their living advising on deals who seem to think things are still being worked on for this year. But its a funny thing with the incoming Trump Administration, you could imagine antitrust in some ways being light touch. Right. But the protectionist elements of it also taking a closer look at any foreign acquisition of a u. S. Company, certainly ones that will result in fewer jobs. So it will be interesting to see how that plays out. I mention that of course today with both harman, a u. S. Company getting bought by samsung and Mentor Graphics getting bought or announcements to be bought by siemens. Neither one of these appear to be big job losing deals. But whats interesting i was thinking this weekend is it possible that the europeans were more concerned about trump coming in than we were . Maybe they werent watching all the various polls including some of the polls now saying, hey, listen, we were right, we said it was only a 70 chance despite the new one. Thats right. But maybe they kind of maybe they realized this is their chance to buy before the door closed, a trump door. Its been kicking around forever. It has. I dont know they were thinking about that. I think a lot of people trying to get ahead of a rise in rates. And now viewers want to know if all those companies that sold bonds now buy companies, right . Well, they certainly got a chance. Theres a lot of money in low rates. Theres a window here where you can buy them. Judging by the action in goldman sachs, the m a is going to be incredible. Thats also a compliance nightmare there, right . Right. But also if youre able to bring a lot of cash back at a 10 rate or say its a little bit higher, that is money you can then use for u. S. Companies. Right. I mean to buy. Because the deals weve seen qualcomm, nxpi was a perfect example they used overseas cash to buy nxpi. That was a good one. Typically youll be able to bring that cash back. I have news on industrials for research on the street today said have you seen the way these treasuries have moved up . This is going to help a lot of the companies that have pension issues. Maybe thats why gm was up so much last week. The pension has been a drag forever. Suddenly yeah. Low rates. Front page of the journal. How long have we been talking about this . There we go. I think this matters tremendously. If we can get the pensions possibly turning, youre going to see earnings per share go up. Wouldnt that be something . Weve been talking a long time about 7 are not doable but theyre making assumptions that they are for a long period of time. Suddenly you get a little pep in the rates. You do. Companies dont have their numbers cut by the way, byebye earnings recession with 90 reporting up 2. 9 for the third quarter. And now the estimates for 4q up for q1, 11. 4. When we go over who missed and not a lot of those earnings estimates were really revised down, but we are seeing major breakdowns in some tech stocks where the money is just going into, you know, funding other areas of this market. Because theres no new money coming in. I know. So theres no place to go. You have to sell. Im just curious about good Old Hedge Fund performance. Another year in which theyre potentially going to suffer particularly over these last couple weeks because these are well owned as you know. Facebook, google, apple, amazon, everybody owns them but theyre particularly loved. I mean, amazon in particular is getting interesting, i think. Well, ive liked amazon forever, but i just think that what you have here is not necessarily for a while people felt maybe what was going on is trump didnt like these companies or whatever. No, theres not enough money to go around to be able to buy both amazon and Union Pacific and amazon and take wells fargo up. Remember wells fargo . They had some issue, what was that issue . They did a lot of cross selling. Wells fargo, was there something that went wrong there . No, it wasnt because the stocks at 53. Somebody replaced . No, he retired. It must have been something thats when people cared about elizabeth warren. Now they dont. Who . Who . Justice warren . Yeah. Not earl warren. That is above where it was pre i remember now what it was with wells fargo, they did a lot of business with customers. More business than people thought. That was bad before. Now its good. They overachieved. Lets just say higher rates trumps scandal. Higher rates trump trump. Trumps higher rates trump scandal. Yes. Well, i was using the trump as sort of the double entendre already, but if you want to use it twice feel free. Im going tata for now. Lets get to bob pisani and check in. Dows up 36. Good morning, bob. Good morning, carl. Happy monday everybody. Dows beating the s p again and thats because financials keep going up. Goldman, j. P. Morgan all helping the dow right now. Take a look at the sectors. Banks just keep moving every single day. Theres the leadership group. Industrials and materials. This is more of the same essentially from what we saw last week. Tech lagging again. And energy, oh, brother, and oil at 42, the lowest since august. Thats a bit of a problem that weve got here. Banks, again, take a look. All 52week highs. All the money centered banks are at new highs essentially, and all of the big regionals, your zions, keycorp. , comerica, same thing we saw on thursday and friday. A lot of optimistic talk over the weekend about growth prospects, things changing. Ed hyman at isi, similar comments to a lot of people saying trumps victory was a game changer. Very bullish on the economy of china thinking perhaps chinas gdp could accelerate to 9 in 2017 from 6 . That was a bit of an eye opener for me. And you heard carl and jim talking about the earnings situation. Earnings stronger than expected. Q4 numbers not coming down as much. And the brexit exit brexit risks, excuse me, receding there. Now, mr. Trump on 60 minutes yesterday did say he was going to build a wall. Whos the beneficiary of that . Theres a couple of companies. Look at flir, they do thermal imaging systems. Build systems allow you to watch people in the dark trying to get anywhere, move across borders or around in houses, that stocks at a twoyear high. Weve been talking last week about infrastructure stocks. There are other names that are out there other than some of the obvious choices doing well this month. Mastec does infrastructure for power, oil and gas. Aecom does similar things. Quanta electric power. Jacobs one of the big ones in the world doing engineering and construction. This is just in the last five or six days whats going on with that particular group. So the trend is very clear now in terms of whats going on. Where are we at . Whats winning . Whats losing right now . Heres the markets after the election. So were seeing financials, industrials and transports are all breaking out. Breaking down are Interest Rate sensitive groups, particularly utilities, reits and telecoms, and to a lesser extent consumer staples, what are called low volatility names that did very, very well earlier in the year. The jury is still out. I know people are saying, oh, growth is sort of out and value is sort of in, so tech is not. Im not so sure about that. Growth is still very valued around the world. Im not also sure that the big rally that were seeing in pharmaceuticals is necessarily going to last. But speaking of breaking down, you want to look at the volumes we saw in the bond etfs last week were quite titanic. And you might not you might say, oh, you know, ishares core etf, which is the biggest etf for bonds that are out there, the largest out there, down 2 in a month. Thats not a lot. Actually, that is. For a bond fund and 3 for the lqd, thats the Corporate Bond, thats the biggest Corporate Bond etf and the high yield down 3 , those are very large moves. But as you heard jim talking there, yields moving up, great news for pension funds, great moves for pensioners overall. So right now the dow outperforming the s p again. Dow up 43 points. Carl, back to you. Bob, see you in a bit. Bob pisani. We are watching oil, which is below 43. Lets get to Bertha Coombs at the nymex. Hey, carl. The strong dollar certainly putting a bit of pressure on oil, but part of it is also just the production dynamics within opec. Its kind of like when you decide on monday morning youre going to start that strict diet. You spend the weekend pigging out on fettucini alfredo, ice cream, french fries and you actually gain two pounds before you start the diet. Opec has been producing allout ahead of their agreement here to try to curb production at the meeting at the end of this month. As a result a lot of folks are wondering whether theyre really going to be able to turn off the spigot especially with iran boosting levels and getting to levels much faster than even they had thought. Meantime, natural gas is bouncing. One of the things to watch here in a Trump Administration if we do see a breakdown of nafta is the trajectory for natural gas, the iea says u. S. Should be a net gas exporter by the Fourth Quarter of 2017 if we continue at this pace to places like mexico, which is a big buyer of nat gas. Finally, take a look at metals, gold under pressure again as folks look for other places to store their money these days, riskon. Back to you. Bertha, thanks a lot. When we come back, former fdic chair sheila bair on the banks and where a Trump Presidency fits into the picture. Dow is up 56. Having set an alltime high in the first 15 minutes. Back after a break. 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. Some tough words out of china for president elect trump. An oped published by communist party run Organization Global times warning trump a titfortat says a batch of boeing orders will be replaced by airbus, u. S. Auto and iphone sales in china will suffer a setback and u. S. Soybean and maize imports will be halted. We know trump spoke with president xi overnight and established what they call mutual respect. But man is that going to be key, jim. Well, boeings the one to watch. Boeings stock acted fabulously. I dont think apple you want to watch as much because thats apple being told by the president elect to bring back jobs. That cant happen. I mean, apple does a lot here. They have a lot of people working here. They have intellectual property most of its here. Yeah. Though for tax reasons it may not be. They have the biggest industrial product, the building of their headquarters biggest Infrastructure Project going on in this country. Lets give them a break. But i think whats important is boeing to watch because, yes, boeings one of the major things that move boeing were iran orders and the second were china orders. Iran pointblank trump is totally against iran policy. And boeing we have to see. But boeing on the Conference Call the two things they really pointed out were china and iran. That was like a kind of a clinton Conference Call so to speak. Yeah, it wont be long before were back to talking about the xm bank. Oh, geez. Remember that . Topic last summer. You should be buying if you want to buy aerospace at this point, you should be buying companies that make them for both. Make them for both. For instance, a honeywell. They are agnostic. You want agnostic airplane parts at this point. Which is interesting because, you know, be aerospace makes for both, theyre neutral. Net neutrality. Did he get rid of Net Neutrality . Not yet. Certainly something you can imagine trump fcc, not particularly focused on. Is anything going to be the same, david . Say again . Maybe our friendship will stay the same. That will be unchanged. Nothing can change that, jim. Dont you worry. Really . Just because youre from queens doesnt mean youre going to washington, right . No, not yet. Mr. Faber goes to washington . Im not sure. Just want to be sure. Well get stop trading with jim in a moment. Dows up 59 but as jim said money will go from fang into crib and the nasdaq 100 is down almost half a percent. Dont go away. Used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. How else do you think he gets around so fast . Take the reins this holiday and get the mercedesbenz youve always wanted during the winter event. Now lease the 2017 gle350 for 579 a month at your local mercedesbenz dealer. Lepes foods is a locally owned here in santa rosa. As a small business, were always looking to save money, and pg e was able to help us. I help the Small Businesses save money and energy. It feels great. We looked at their lighting, their refrigeration system, and with just those two small measures, they were able to save a good amount of money. I was shocked. I couldnt believe that i could save 1,500 a month. With the savings that we get from pg e, were able to pass it on to our customers. Its pretty awesome. Learn how your business can save at pge. Com businessenergycheckup. Together, were building a better california. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats 10 times faster than slow internet from the phone company. Say hello to internet speeds up to 150 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Time for cramer and stop trading. Reluctant to talk about these, they had been on mad money a couple weeks ago. Lightning round they came on, listen, weve got something interesting. The shorts are all over this thing and looks like right now from the phase two that it was a bad short. But all i can tell you is that these biotechs are very binary. So, please, if you pile on corbus right now, you dont know as much as everybody else, which is not a good thing. Mad money tonight . We have cyberark. Weve got dinesh and its kind of a victory lap. Weve been behind harman for a very long time, since wood stock, right . Since woodstock with the jbl . What have you been longer with that or starbucks . Thats a very, very good question. Starbucks is probably one of the first stocks when howard was there and then howard left, we downgraded the stock. Mr. Donald came in and when howard came back we upped the stock. And weve been with Howard Schultz ever since. You know, look, howards doing some great stuff for veterans. I know that kind of stock, that fast growth stock, thats where the money is being sold to go buy, you know, cliffs natural. That move does reverse at a certain point. Were not going to turn into a coal based company because too many utilities switched out of coal because they thought there might be another, you know, the epa was never going away, coal plants were going away. So dont expect a radical resurgence in coal. Yeah, despite some of the campaign rhetoric. Yeah. People feel like jim, see you tonight. Mad money 6 00 p. M. When we come back former fdic chair sheila bair as banks prepare for a trump white house. Dows up 46. This just in. 50 million customers data was not compromised this morning in a Security Breach that didnt happen. Wall street, not rattled. At all no. Sir, sir. What went right . Everything. We have a brief statement on this nonbreach. Were happy to report theres nothing to report. My dads company wasnt hacked today. Cool. My dads company wasnt hacked today. Guyhey nicole, happening here . Mpany wasnt hacked today. This is my new alert system for whenever anything happens in the market. Kids a natural. But thinkorswim already lets you create custom alerts for all the things that are important to you. Shhh. Alerts on anything at all . Not only that, you can act on that opportunity with just one tap right from the alert. Wow, i guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. Is happening before our eyes. Shift in Human History sixty to seventy Million People are moving to cities every year. At pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. Partner with pgim the Global Investment management businesses of prudential. Good monday morning. Welcome back to squawk on the street. Im Carl Quintanilla with david faber and mike santoli at the new york stock exchange. Week two of the transition taking place. Got some m a, fed speak returns, a lot of information this week, dow up 28 points having hit alltime high in the first few minutes. Road map this morning starts with the markets of course. As you see stocks continue that trump rally. The dow hits an alltime high marching towards 19,000. How far can the bulls run . Plus, trump transition picking up steam, new appointments, a 60 minutes interview and Campaign Meeting with nigel farage. Well speak with one of trumps advisor advisors. And were going to hear from former fdic chair sheila bair and get her take on banks and deregulation under president trump. Two well known boutiques joining forces. Kate kelly is here with more on that. Good morning, carl. Interesting news out of new york and houston, perella to combine with houston based Investment Bank known for Energy Practice. Theyll combine into one firm with total 12 billion under assets in management, more than 650 employees across multiple cities. Tudor pickering known for energy work in houston and beyond. Its obviously been a tough two and a half years in the energy patch. And im just speculating here, but one would think that had affected their business. In terms of Perella Weinberg, theyve been involved in some major deals. They will continue to use the Tudor Pickering name when it comes to the Energy Practice and looking to leverage some of those expertise as they go about their own business, which is very global and crosses sectors from financials to telecom and so on. Im sure david knows those folks even better than i do. Some of them, yeah, Perella Weinberg we do, kate. Interesting theyre moving into that part of the world as well. It is. Weve seen a growth of the boutique Investment Bank in the last five to ten years and now at least in this one case were seeing some combinations occur. So unclear whether well see more of it. But, you know, maybe with the markets acting like this there will be greater opportunities in the next few quarters. Kate, thank you for that. Our kate kelly back at hq. Meantime, as we said, this postelection rally continues this morning. Being accompanied by a fresh narrative on a Trump Presidency. Should you believe the bulls though . Mike santoli is joining us for the hour having the weekend to percolate on some things. Yeah. You know weve seen one of these very violent rallies after a shocking vote, which we had in june after brexit, but one thing thats different right now i think is the story line accompanying this rally, which obviously after the election is all about an assumption, a rush to assume some progrowth policies that are being priced in to all kinds of sectors of the market. I do think everyone is onboard with this idea. You have to get a little bit more cyclical, small caps versus large caps, value versus growth, riskier stocks versus safe stocks. And also people are kind of saying dont worry about the stuff we might not like in a Trump Presidency hes promised such as immigration restrictions and strict trade restrictions perhaps if we get those down the road. Now, to me, the question is how far can this go before we have some details . And also where could it go wrong . Could we be in a position with rates doing what theyre doing where we think the fed might be behind the curve . Most of the trade has been about rising Inflation Expectations as opposed to longterm growth rate expectations. The u. S. Dollars also rallying very strongly. Its already pressuring emerging markets. Has the bond move and dollar move too fast . And i view it as a high beta economy. Wider range of outcomes versus what we would have had for clinton, means upside risk but also susceptibility to policy shocks and headlines and surprises like that, carl. Mike, dont go anywhere. Lets bring in art cashin director of floor operations at ubs joining us here at post nine. Good morning to you. Good morning. You agree that the spectrum of possibilities got wider on a number of fronts . I agree. I think mike is right to be a little concerned with this rise in yields and Interest Rates because its a little too early to say but theres an outside chance it might be our old friends the bond vigilantes who might be back saying youre going to do tax cuts and stimulus spending, what is that going to do to the deficit and where are we going to go from there . So as i say, if it continues for another week or so, then well think the bond vigilantes are back in here. Is the absolute level whats important . Or as mike suggested today the repetty of the return to these levels. Its the repity of the reaction. Weve had a heck of a move just since election day. Its continuing were pushing above 2. 25 in the 10, you get up to 2. 5, youll get a lot of attention in a lot of places. So you could wind up with them stepping back. Theres always a risk. Some people are projecting the idea of the worst of all worlds, stagflation, that you begin to get the inflation that were looking for, but the stimulus doesnt really work because of the high level off indebtedness we have. And i think you have the markets doing this calculation saying youre going to be pouring a lot of cash into an economy thats already at 4. 9 unemployment, youve already got rates where they are. Its not that its running hot, but its had a long slow expansion. So its not as if theres a lot of dead capacity out there. And thats why inflation is the thing that seems most obvious to move and the growth is more of a question. Friend writes in and says its called velocity. How much of that is true . Well it is. And what well be watching to get a hint relevant to the inflation is the money supply and see if there is velocity in the money supply. And the monetary stock. The form chart says this week is supposed to be a consolidation week. Youre supposed to reabsorb some of the gains youve had and see where you go from there. That can get disrupted by as you said earlier new and unfolding details about what the administrations going to look like and where theyre going. So for now on the low level i think you want to watch s p 2148 to 2152 as support. And resistance up around 2180 to 2185. The banks, art, i mean its just been a little over threeplus trading days, im looking at them right now. Bank of america up over 5 this morning alone. What is your sense in terms of the ability of that to continue . And wheres that money coming from thats moving in there . Well, youre going to be able to add somebody special very shortly. Sheila bair can tell you, these things are running on deregulation. They believe that, yes, youre going to get some move up in Interest Rates, but more importantly they believe that theyre going to undo several of the more onerous things that came out of dodd frank and the like and how much they get freed up is why those stocks are all running. So its not just rates. No. Not just rates. Deregulation that you think is a good idea . Well, depending on how it comes. I dont think you want to do a sweep across the board. But for example, some of the regulations aimed at the bigger banks are wreaking havoc on the smaller regional banks. I mean, people are bumping up their compliance departments by bigger than they ever had a trading room. So thats very expensivexpensiv. And if theyre going to change, they better do it soon before everybody gets bulked up and it will be a problem the other way. Yeah. We know that story. Art, thanks a lot. My pleasure. Art cashin here at post nine. Well, coming up, the trump transition were going to discuss president elect Donald Trumps picks. Well also speak with one of his advisors. Plus, former fdic chair sheila bair is going to join us. Well get her take of course on the president elect policy plans involving the Financial Sector and a lot more. Stay with us. Youre watching squawk on the street. Our mission at clover is to create the best tasting, highest Quality Dairy products. Clover has relationships with 27 different family farms. The environment is who clover is. Without it, were nothing. Pg es been a great partner. Theyre the energy experts, were the milk guys. Pg e worked with clover on a number of Energy Efficiency projects to save energy every month. If youre part of the fabric of the community, youve got to ensure that you do things right, environment included. Learn how you can save at pge. Com save together, were building a better california. We turn to politics this morning and the ongoing white house transition. President elect donald trump naming Reince Priebus as his white house chief of staff this weekend. And the current rnc chairman joined the today show this morning discussing whos advising trump and what to expect policy wise. Take a listen. In advising the president i would suspect that me, steve bannon, i think jared cushner, obviously his soninlaw is going to be very involved in decision making. So thats the kind of President Donald Trump is going to be. And i think youre going to find that in a few months as people see the agenda roll out in the first 28 days, first 100 days, that hes going to be a president for all americans and hes going to make you proud. Joining us this morning Trumps Campaign senior Economic Advisor steve calk, chairman and ceo of the federal savings bank. Steve, good to see you again. Great to be back, thank you. Carl. Last night chopped a lot of wood on roe v. Wade, obamacare, but not much on yellen, taxes or federal trade. What dwuo you think the market will be most interested to hear in the dayings ahead . I think its going to be reaction to the policies rolled out. Folks laughed at me when i thought what the Market Reaction would be when we cut taxes from 35 to 15 and put that money back in the companies to do mergers, acquisitions, add employees, open plants and expand. I got a lot of ridicule, but to me it was common sense. And i think what youre going to see is continued feedback from president elect trump and his team on things that are really going to move the needle. If folks thought he was joking about implementing those plans of growth, you know, theyve got another thing coming. I think what youre starting to sense, especially as we unroll the cabinet and you see these various advisors share how mr. Trump thinks and works by gathering the best advice for the best people he possibly can and make a decision that always puts america first, i think the markets going to react very favorab favorably. If we take what he said on the trail as truth, he also said Companies Like amazon and apple are going to have a problem. He said yellen should be ashamed of herself. How much of those do we take to the bank . Well, i think you need to observe the policies that are rolled out. So many times folks have twisted and turned and made their own interpretations of what those comments meant, but i think specifically on those issues what were talking about is fairness in trade. So for example weve chatted before about creating trade balance versus imbalance as it pertains to things like the v. A. T. Charged by mexico. So American Companies can manufacture products in the United States and then export them to mexico, and theyre whacked with a 16 v. A. T. , whereas companies manufacture a product in mexico and send it to the u. S. Are paying zero. Those types of things can change. So i think when youre talking about distribution, its the interface of manufacturing and how that will effect trade balance as a whole. Steve, what about an area that obviously is pretty close to you in terms of bank regulation, dodd frank. Theres been talk ranging from full repeal to maybe were going to just remove some provisions of it. What do you think the priorities are and ought to be on that front . It doesnt seem as if that was necessarily a leading issue that Trump Supporters actually voted for him to get done necessarily. Right. But it could be the things that really impact the American People the most. You know, the whole idea is to get out of this rut after the priority of course of creating jobs. Its freeing up credit for americans. One of the best ways to do that is to lighten the burden on community banks, to have the opportunity to get a little bit of regulatory exemptions and adjust dodd frank in that area. I think we also have to look at how these extremely burdensome regulatory guidelines have affected the mortgage industry and how those folks are making credit available for homeowners and folks that want to power the american dream. And lastly, consumer finance. At the end of the day we want people to have access to credit to get out of a hole, to create an opportunity, to start a business, and most importantly keep cash flowing so that we can ignite the entrepreneurial flame that we know exists that were starting to see the spark of again here in the United States. You worried at all about this chinese oped saying watch your back when it comes to trade . Look, i think what weve definitively agreed is that mr. Trump is going to continue to start, initiate and participate in conversations that are going to create relationships to advance the american interests. I dont think that jumping into some type of conflict discussion or in some way making more of an initial conversation than what really is occurring is productive or the right thing to do at this time. Yeah. How does the market prepare for that though . Will you acknowledge that the market at large is going to go through a period of adjustment in dealing to a wider range of possibilities policy outcomes . I think thats a natural progression, right . I mean, at the end of the day we need to see as these policies roll out how does the american first policy affect other countries . How will they react . And i think theyre going to react very positively in a way that they want to cooperate. Look, were an enormous, enormous economy. There are other three, four, five economies that we want to be very, very concerned with and how they interact with the u. S. But at the end of the day keeping a focus, creating a leadership discussion around the fact that americas first and we need to have our best interests at heart and putting that out front and not pretend its a back room conversation will continue to give the markets confidence. Steve, were going to watch it carefully. We really appreciate having you on because we need all the guidance we can get. By we i mean the markets at large. Thanks again. Its an exciting time. Lets hope everybody gets onboard. Steve calk joining us talking about trimp trump and the economy. Meanwhile nigel farage visited donald trump at his home in trump tower over the weekend after suggesting he could act as a gobetween to help smooth british relations with the u. S. Farage tweeted a photograph of himself with president elect trump saying it was a great honor to spend time wit with realdonaldtrump. Im confident hell be a good president and then he spoke this morning on squawk box about the meeting. We talked act the election campaign, we talked about being the outsiders, if you like, not part of the establishment. And pulling off these two remarkable victories. Brexit and trump getting elected 2016 has been revolutionary in democratic terms. I saw a very thoughtful, very reflective donald trump thinking very hard about the job thats coming up. And in particular thinking about how he can create jobs, how he can create wealth. And i would just say to people dont underestimate this guy. You know, hes made a big, big success of his business career. And he intends to be a successful president. And i think he may well be. A lot of people talking about the idea that uku. S. May return to an era where reagan and thatcher got a lot of stuff done for people on their behalf. They did. I mean, i guess the question is are they kind of leading the rest of the western world in a certain direction. Right now were looking to italy and france to see if in fact this is going to be some kind of a chain reaction. Im not sure how markets would react to that because that brings the euro story back, you know, to the front burner. But, yeah, it is certainly interesting. And it was going to otherwise be probably a pretty frictional relationship if trump did not win. Yeah. I guess i find myself sometimes wondering about the progress in our economy. We talk so often about Machine Learning and a. I. , the internet of things, Autonomous Cars. When i think about the end result of that it ends up being fewer jobs, not more jobs. It will be interesting to see the fight in terms of returning jobs here and bringing more employment versus these signs of progress that would seem to eliminate employment. I forget who said last week a lot of these jobs were taken by a microchip, not mexico, right . And explaining that to people is going to be difficult. Plus, if youre talking about, you know, reagan replay, i mean demographics 100 different than they were back then. Thats a big part of the story. I guess we didnt know if they argued over who gets to be called mr. Brexit. All right. When we return, real estate in focus as mogul now president elect trump gets ready to take office. Can he reshape that market . And as we head to a quick break, lets look at stocks at this hour tacking on some gains actually. Dow up 78 points. And still leading the way. Well be back soon squawk on the street. Stay with us. Well, Real Estate One of many areas that will be under the spotlight under president elect trump. Will his background as a real estate mogul help to reshape that market . Diana olick joins us now with more. Diana. Well, his effect on real estate will have less to do with his experience as a developer and more to do with his promises to deregulate the financial system. The big bank haves basically pulled out of fha lending already and kept underwriting very tight on other loans because theyre afraid of putbacks and lawsuits. The cfpb has a lot to do with that. Now, dave stevens, ceo of the Mortgage Bankers association, told me that barring a change at the cfpb, its hard to imagine well see much change in the nearterm. Director cordray is an independent regulator and term runs through the spring of 2018. Stevens also said Republican Leadership is not eager to see fha chrks is the government ensured low down payment loans expand, and we could in fact see an fha rollback. Then of course fannie mae and freddie mac still under government conservatorship. Their stock actually moved higher last week with some investors thinking that donald trump will recapitalize and release them. But trump said nothing about the two during the campaign. Now we have a Republican Controlled Congress and the mortgage giants generate billions of dollars that goes straight to treasury. That money could be well spent on the Infrastructure Projects donald trump has promised. So you know why mess with that . What we are seeing immediately though is a sharp jump in Mortgage Rates due to the bond markets selloff. This may be the biggest housing effect of a Trump Presidency for at least the first year. The average rate on the 30year fixed added a quarter point last week and looks like it will move even higher this week. So so far the trump effect on housing is that housing is now a little bit more expensive. And if we continue to see rates rise, we could see home prices start to fall and eager to get those homes sold at an affordable price. Back to you. Yeah, you know, diandiana, Something Else you and i havent talked about in a long time, the gses and reform there. I think fannie mae, freddie mac, the stock has been moving up i have no idea how it goes from dealing with the conservatorsh p conservatorship. I noticed the Dividend Payment was made recently from fanny to the treasury again. Any feeling on where things may go . Ive talked to a lot of people and the consensus among everyone is they are paying billions of dollars back to the treasury and republicans in the house and senate are not eager to lose that money that theyre getting. Weve seen plans from hensarling, et cetera, but it doesnt look to be a big priority in the first year or so when theyre such cash cows. Why would they want to give up that money . Yeah, its like 188 billion. And every quarter its billions more. Diana, thank you. Diana olick. When we come back dakota pipeline generating more controversy. Were going to head to north dakota to find out why. Plus, former fdic chair sheila bair will sit down with Rick Santelli. Russell 2000 just hit first alltime high since june of last year. Back after a break. Wildcaught alaskan salmon. From icy ocean waters. To your kitchen counter. Pure. Pristine. Each one its own delicious artic prize. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbystepreciepes. Delivered to your door, for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Speed always wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Good morning everyone. Im sue herera. Here is your cnbc news update at this hour. New zealands Prime Minister touring the area impacted by a powerful earthquake that triggered a small tsunami over the weekend. The 7. 8 magnitude quake hit a mostly rural area that is dotted with small towns cutting off the main highway and causing billions of dollars in damages. Wikileaks founder Julian Assange was being questioned by prosecutors about possible Sexual Misconduct committed in sweden six years ago. He was being interviewed at the Ecuadoran Embassy in london where he has sought refuge for more than four years. Prosecutors plan to ask him for a dna sample. Residents in north georgia are being told its no longer safe to stay in their homes as crews work to contain a wildfire that continues to spread. As of last night only 10 of that fire was contained. So far more than 4,000 acres have burned. And the largest, brightest moon in nearly 70 years will be lighting up the sky this week. For star watchers across the globe it reached its most in asia and south pacific, the next time it will be this close 2034. Thats the news update this hour. Carl, back down to you. Sue, thanks a lot. Sue herera. The dakota pipeline access generating controversy and protest. Our Jackie Deangelis is in north dakota with more on that. Good morning, jackie. Good morning to you, carl. Well, if the battle over this pipeline certainly has heated up and were waiting on a digs for the next steps from the Obama Administration today. Since april you can see the camp behind me. The Standing Rock sioux tribe and others have been camped out here looking for some resolution to this conflict. This protest area has swelled to roughly 6,000 people. The permits right now under review by the federal government. The project would be 1,172 running from the bakken to illinois, eventually to the coast. Proponents argue its a safer way to transport crude in this country. Opponents contest the environmental implications and disturbing the peace in the area. Now, these decisions are always controversial and always difficult. Think about the battle over the keystone xl pipeline. But president elect trump has pledged to be probusiness and proinfrastructure and to roll back some of the environmental regulations that could push projects like these through, which may include dismantling the epa. But trump has been singled out on this project. Even though he hasnt commented on it, some saying his personal investments in Energy Transfer partners, thats the pipeline builder, and accepting Campaign Contributions from etps ceo create a questionable conflict. Still, the chairman of the Standing Rock sioux tribe says that a Trump Presidency doesnt change their stance on this. We know how to get through each administration. Weve been doing it for past 50 years, 100 years. And well continue. Its time for us to start controlling our own destiny. And not worrying about whos in office. Reporter and as i mentioned today we are awaiting a decision that could potentially chart a path forward when it comes to this project. And certainly both sides are waiting. They both are confident that theyre going to win, carl. Yeah, jackie, thanks very much. Just exactly what is the timing look like . Even if they get clearances how long would it be before this pipeline were built . Well, actually, Energy Transfer partners has worked in the surrounding areas to make sure that the timeline for the project has been preserved. So theyre really waiting for this area to go through to get those permits for completion of the project. But of course if the ruling today for example is in the companys favor, youre going to have the tribe continue to protest. Many others out there as well. So this isnt necessarily a decision thats going to be resolved this week. All right. Jackie deangelis, thanks very much. Appreciate it. Meanwhile, a rout in global bond markets underway even as equity markets in the u. S. Rally post trump. The 30year treasury yield crossing the 3 mark now at the highest level this year. For more on the markets and political risks ahead, we are joined by chief Investment Officer at bmo wealth management, and tina fordham, chief Global Political analyst at citi. Thank you both. Jack, the markets have priced in assumed outcomes in terms of Trump Administration policy and how it bears on the economy and markets. Do you think the market has gotten this right or overheated in some areas . Well, i do think that in general the market has gotten it right. But i will say that market is giving trump and the administration the benefit of the doubt, which is probably a good thing at least initially. Eventually we are going to have to see where some of the cuts or where some of these issues are going to be. Look, bottom line is trump came into office on low growth and that the split between profits and wages were skewed more toward profit. I think what he is hoping to do is provide enough growth or at least inflation so he can fund both sides of that equation. Well see if that works out. And tina, how do you handicap what the new administration might take as its highest priorities, how it might go about things . Theres a series of measures from just very quick executive orders to some deregulatory moves and then some thornier legislative priorities. So how do you think the agenda gets set initially . Well, i mean, i think were seeing them float some trial balloons with the initial choices of the key positions. Weve already seen trump walk back from a number of his more radical proposals. Some of which we know are either difficult or expensive to implement or possibly unconstituti unconstitutional. With regard to how the markets are taking this by the way, i think the markets are as ever getting ahead of themselves. The Infrastructure Spending and the stimulus there isnt likely to come into effect until 2018. And i do think before businesses hire and expand more theyre going to take a look at things like losing some of their low cost workforce and likely changes in regulation before they do that. Hey, jack, a lot of discussion this morning about republicans for whom deficit spending seemed anat ma for years. Suddenly its a good idea. I wonder if you see any mean reversion there, if that point of you can last or if were truly in an upsidedown world now. Its remarkable that we really havent heard much about deficits and debt and all that, maybe with Interest Rates as low as they are. I think that, you know, given a position now standing between you and your constituents and jobs perhaps puts house members in an awkward position. On the other hand they have pretty much maintained this fiscal responsibility mantle. So it will be pretty interesting where that plays out. But keep in mind were about to embark on this fiscal program, which by the way takes a huge burden off the fed. At a time where we could argue were near full employment. So i do think that the market is getting the inflation pressure right, the Interest Rate piece right. But i think there are areas where Market Participants are wrong. I think farm in particular is probably one where investors are going to be disappointed. And, tina, you know, we were talking earlier about Nigel Farages visit to mr. Trump and what itd might mean for u. S. Uk relations and also whether it represents some kind of a locomotive of some kind of populist movements around the world. Were not really talking about Foreign Policy implications here, but what do you think that all might result in . Well, i think thats probably one key area where the markets arent fully appreciating the extent of a possible trump knockon effect in european politics. The fact that steve bannon has been in touch with la pen and we have french elections coming up soon, we have an italian referendum coming up very soon, december 4th, where i think its quite possible some voters there might take heart from the trump effect and be prepared to push the no button would lead us into early elections in italy probably next year with early elections in the uk possible as well. I mean, the spectacle of seeing trump standing next to nigel farage, farage has run seven times and failed to get a seat as an m. P. , hes had a massive boost to his personal selfimage. But i think discussing reinstating the bust of Winston Churchill in the Oval Office May not do as much as what Prime Minister theresa may would like to have which is the uk go to the front of the cue as opposed to the back. President obama called it for a bilateral trade deal. Sure. Just an important point i want to followup on tinas comments, that is while certainly populism in uk and u. S. Have been great, remember, we have our own currency. Once we start breaking away in italy, france, you know, netherlands, you know, theyre on a common currency so now we get a euro issue. And thats something we have to really probably end up grappling with next year. And, jack, just quickly, what would concern you in terms of rhetoric or tangible moves from the trump, the incoming Trump Administration into what the markets care about most . The comment about the fed, is it fed appointees . Something that you think might be a little bit of a third rail for markets . I think what would be a third rail, you know, keep in mind a lot of the consequences or implications of all this trade has really developed since the early 1980s. And so we have a lot of interconnections that have been built. And i think that if i get a sense that for example trump and his advisors are willing to just make statements that, you know, undo a lot of this work without considering all of these pieces that have been built over time, that would start to be a concern for me. Sure thing. All right, jack, well be watching that cht appreciate it, jack and tina. Thank you for joining us today. Thank you. President obama set to hold a News Conference this afternoon at the white house before departing on his final foreign trip which will take him to greece, germany and peru at the apac summit. Well bring that to you live on closing bell this afternoon on cnbc. As we go to break financials by far the best performing sector today. Banks are helping power the dow to a record high with gains for goldman, j. P. Morgan, amex, although the nasdaq is negative. Were back when we return also former fdic chair sheila bair with our Rick Santelli and her first interview since the election. Well talk banks and regulations in a moment. They may want the latest products and services, but they demand the best shopping experiences. Theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. After the big run the last couple of days, is this the perfect time to buy some protection for your portfolio . We address that at tradingnation. Cnbc. Com. More squawk on the street coming up. Welcome back to squawk on the street. Markets were higher given up a lot of those gains right now. Still financials as you can see there dominating the positive price action. S p 500 financials are the best performing sector today. And by a pretty wide margin. This as banks surge on hopes of deregulation possibly in higher rates on the back of trumps president ial election win. Ree jons financial, bank of america, Lincoln National all up the most between 4 and 7 in the early going. The spider s p bank etf also up by about 3 as well. So this winning streak for financials, mike, continues. One of only four sectors in the green. Back to you. Very strong theme, dom, thanks very much. Lets get to the cme where Rick Santelli is live. Hi, rick. Hi, mike. We are at historic college. Washington college is the tenth oldest education entity in the entire country. And sheila, sheila bair, my special guest today, were going to be doing a panel later on, shes the president of this college. And if you look at the nine other colleges that are technically older, they were all chartered under british rule. So really makes Washington College unique. Exactly. You know, sheila, theres only one place to go. You gave a lot of speeches when you were chair of the fdic. Right. You always started with a line that was roughly the best regulation are less regulation. Yeah. If ever there was a dynamic that the markets have taken the charge to, thats it. Three branches of government, all republican, i think were going to get a lot done. I think regs is one of the top on the list. Well, i think so. I think, you know, regulations, we need smart regulation. We dont need no regulation, but this simpler, shorter, more direct rule that gets to the core of a problem is always much better than this quite extensive labyrinth of thousands of pages of rules that a lot of the incremental benefit is far from clear. So i think if we get smart regulation, thats a good thing. You might not have kept up with some of the recent moves in the market, but it really is just so exciting. We now have 10year note yields flirting with unchanged on the year. Yeah. Closing in on a 2. 3, we have the dollar index flirting with 100. Thats right. These are really big dynamics. Big changes. Do you think that this is something that can continue based on the variables that you know so well . Right. Well, the good news and the bad news is, i mean, i think there are economic benefits. Itd be nice to get to a more normalized Interest Rate environment, but i think we want that on a slow and steady trajectory, so the markets getting a little ahead of us. That might have some negative economic repercussions. On the other hand ive always argued ive never liked low Interest Rates and ive always argued the smart thing for congress to do is to have some fiscal stimulus as the fed exits to counter whatever kind of negative Impact Higher Interest Rates might have on the economy. So we may be in that sweet spot now with mr. Trump coming in, doing hopefully smarter regulation, lowering top rates, hopefully also in a smart way and hes closing loopholes at the same time. Infrastructure spending, which ive long advocated for. So, yeah, i think the stimulus he can provide with his program to counter getting out of very low Interest Rates could be a very huge plus. A nice gol dilocks. All roads lead to questions regarding monetary policy. Yes, they do, right. Its no secret ive thought rates are too low and the notion of raising rates when the economic horsepower was low didnt make sense. But the current level doesnt make sense. No, it doesnt. The markets are giving the fed no alternative in my opinion. Do you have any thoughts in that direction . Well, i do. Again, they need to stay on course, maybe they can accelerate big again if they have a good sound fiscal stimulus policies to counter their exit from very low Interest Rates. So i think those are all positive things. You know, and i think the fed will be the composition could be changing very quickly. There are two vacancies there already, i believe both mr. Fischer and mr. Yellen, well, in the next 18 months their terms are up. Whether the current feds going to be with the program i dont know. Clearly they want to do i assume they want to do an incremental rate rise in december. But longer term given changing Economic Conditions as well as the ability of the president elect to put four governors on the Central Bank Board could mark a very, very different Interest Rate environment, a very, very different monetary policy. And finally, the reason why were here. All these young people. 1. 4 trillion in student loans. Breaks my heart, yes. How is this fiscal mess going to affect the American Youth . And quite simply theres only one way that ive ever seen in the history of any country modern times to get out of bad debt, and thats big growth. Big growth. Your final thought. Well, we need big growth. Of course the dark side of increased Interest Rates is we have all this deficit financing, we have this Huge National debt. And so as Interest Rates go up, thats going to be more and more of the budget is going to have to go to interest payments, which is also going to put pressure on further spending programs for our people. We need smart stimulus and fiscally responsible stimulus, one thing else the new president has that i love is to shift from a debt to an equity model to have financing of student debt, repayment be based on some percentage of income, get away from the debt model, away from the negative amortization were seeing with current programs. It was viewed as radical when he made the speech in ohio, but i think its got tremendous promise and could get good bipartisan support. Nigel farage was considered lets try something new. Whether its fed, fiscal policy, we need to break the glass. I agree. Time for change. Sheila, thank you. Well come to you with more programming from Washington College. Now back to david faber. Well, thank you very much, mr. Santelli. I will send it to jon fortt to give us a look at squawk alley at the top of the hour. Well, david, start of first full week with new president elect and major indices may be mixed but some tech stocks have been taking it on the chin. Well tell you which those are. Also, samsung major move kind of perhaps its moment why does all that matter and more coming up on swauls. Squawk alley. When a moment turns romantic, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Good for a door. And a network. Comcast business. Built for security. Built for business. Trump tower has been at the center of daily protests. More on how this is impacting real estate and businesses right in the heart of fifth avenue. Robert . Reporter hey, david. Well, one of the questions that the new trump era is what happens when the president of the United States lives on one of the busiest intersections in america. Right behind me is trump tower. Thats where donald trump has his threestory penthouse and corporate headquarters, and because of all the security needed to protect the president , this area of midtown smack in the middle of manhattan has become a giant ring of steel. There are metal fences, there are concrete barriers, there are police with automatic weapons everywhere. This area has become a nofly zone. A lot of the lanes and streets around here, this is fifth avenue, one of the busiest streets in america, this is important for bus traffic, for Emergency Vehicle traffic, for taxis, because a lot of the lanes and streets are closed, this has become a giant choke point in manhattan. This is also a really important shopping area, or at least it used to be. We have prada, we have tiffany, their main store right behind me, we have gucci in the trump tower, and right now in order to get into the stores you need to bypass very heavy security. Not exactly the most conducive environment to selling 3,000 handbags and lots of diamonds. Now, the question is, how long will this continue . Sources close to the trump family tell me that mr. Trump wants to continue spending some time in new york city, even after he becomes president. Mayor de blasio said that would be, quote, untenable, but, of course, starting in january thats going to be mr. Trumps choice, not the mayors. Guys, back over to you. Robert, of course, this is not something perhaps the rest of the country shares, but theres a great deal of concern i know amongst new yorkers to your point about simply being able to get around the city if the president when he becomes president trump, spends a lot of time in new york. A lot of people seem to think he will. Not to mention, i think, his son is still going to be in school here, his youngest son. Who pays for all that, and how is that seen breaking down over time . I mean, in terms of expectations of how he spends his time in new york city and how you deal with a sitting president coming to town all the time. Yeah, well, nothing says the president has to live in the white house. Donald trump loves his penthouse. He loves spending time here. Its his routine. He at least wants to spend some weekends here. There could also be stock impacts, guys. Tiffany right behind me, thats their main moneymaker, their big store. This is the prime selling season for tiffany. Right now i was just in that store, it is virtually empty. There were just a few customers. This should be primetime for them. So, yes, its traffic for a lot of us like you, david, who live in manhattan, but also could be major impact if they do a lot of business in this area during the holiday season, which is coming up right now. And right now you see a lot of protesters, but not a lot of shopping going on here right now. You know, robert, theres also protests in front of trump park on 60th and central park west, and interestingly, theyve actually extended to in front of 15 cpw, where, of course, we know a lot of people, Big Hedge Fund managers, number of people who run big Financial Companies live, as well. Kind of funny, there are protesters out there all the time now, too, arent there . Yeah. Look, were all used to midtown manhattan, you know, when the u. N. Is here, when the president s here, were all use the to that, but if this goes on here for four or eight years, that could really change life in manhattan. Not just for midtown, but this is to get downtown or uptown you have to go through midtown, so the subways right now are clogged, the streets are clogged. If this goes on for four to eight years, that becomes a different city just because of this new normal. Yeah, well, thank you, robert. Michael and i, of course, we are already subway users. City bike, too, im telling you, its been good to me. When it gets colder, not as easy. Fifth avenue is always good to avoid this time of year anyway. That does it for us here. Quick look at the s p. Of course, we are actually down on the session. Having reversed earlier gains, financials continue to be the real winner this morning. Many of them up 3 , 4 , as much as almost 5 in the case of bank of america. You can see right there the dow just fractionally in the green and the nasdaq continues to suffer with the likes of apple, facebook, and google all down between 3 and 2. 5 . That does it for us here on alibaba. Stay with us. Excuse me, squawk on the street. Squawk alley coming up after this. Attention are you eligible for medicare . The medicare enrollment deadline is just a few weeks away. Changes to medicare plans could impact your healthcare costs. Are you getting all the benefits available to you . New plans are now available that could increase your benefits and lower how much you pay out of pocket. To update your coverage or enroll for the first time call healthmarkets. Well help you make sure you have the right medicare plan. Hi, im doctor martin gizzi. Its a new medicare year. That means more changes. And more confusion. Heres what i tell my patients. Start by asking. What kind of care is best for your Current Situation . Have there been changes in your health or medications . 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If you miss the deadline, you may have to wait another year before enrolling. Call a licensed healthmarkets agent now. Call now. Call this number by the deadline. And let healthmarkets find the right medicare plan for you without cost or obligation. Call now. Good morning, its 8 00 a. M. At facebook headquarters, 11 00 am on wall street. Squawk alley is live. Good monday morning, welcome to squawk alley. John ford, kayla tou shee and myself at post nine. Joining us, roger