Transcripts For CNBC Squawk On The Street 20161229

Santoli. Were live from the new york stock exchange. Jim and carl continue to have this week off like so many of you out there right now watching us, most likely. If you look at futures this morning of course its thursday. Weve got two more days. We backed well off from dow 20,000, but that wont stop us from talking about it, will it . European markets you ask, well, lets answer that. Give you a look. Uk also open again. Of course hadnt been well, it was yesterday, not the day before. You can see they add spain and italy in the control room just to make me happy. Thank you very much. Down lets call it almost across the board other than italy. 10year note yield hanging right in there right around 2. 5, up a little bit in price. And theres a look at wti. Our roadmap for the hour begins with president elect trump taking credit for the 8,000 new jobs coming to the u. S. Workforce. Will other Companies Follow suit . And as we drift further away from that dow 20,000 target, we look at what history tells us about the timing of the milestone. And apples attempt at securing one of the largest smartphone markets, india, one of the latest hurdles. Well discuss that. But first, president elect donald trump says sprint is going to bring back 5,000 jobs to the United States while a Company Named oneweb will add 3,000 jobs. Common theme here, softbanks masa son spoke with trump this month, softbank owns majority stake in sprint and also investor in oneweb, heres donald trump at maralago last night. I was just called by the head people at sprint, and theyre going to be bringing 5,000 jobs back to the United States. Theyre taking them from other countries, theyre bringing them back to the United States. And masa and some other people were very much involved in that, so i want to thank them. And also oneweb, a new company, is going to be hiring 3,000 people. So thats very exciting. And that companys founder, greg weilor was on squawk box this morning discussing the types of jobs hes looking to fill. These will be very hightech, highly skilled Manufacturing Engineering jobs. So really right at the cusp of highly skilled manufacturing and engineering. And where will they be based . Really all across america. We have a very broad supplier base, so in florida, a lot of jobs in florida, a lot of jobs in arizona, maryland, virginia and of course california and many of the different states around in smaller numbers. Interesting of course to see these moves. Every job is important. Its great to see jobs potentially coming back or being added. But of course there is the larger issue of progress. We talk about it so often and whether or not you can actually stop that, which typically comes in the form of automation and robotics and so many things that are going to continue to dislocate the u. S. And workforces worldwide. The sprint deal is interesting in and of itself guys, in part because masa son, of course who controls softbank, which controls sprint, has been looking to do a deal for a long time with tmobile. They have an enormous amount of debt, theyre still setting up an off Balance Sheet hand set financing vehicle. Theyre going to be potentially parting with some of their 2. 5 gig spectrum, and they want time perhaps as well to try to figure out a way to get together with tmobile again. Given the heisman a couple years back by actually, the current fcc chair stepping down. You have to wonder if this doesnt figure into that mix. Stock up about 40 since the election, not just a good year, a really good couple of months. And you have these examples of these companies that have decided to keep or bring jobs to the United States where one way or another they want to remain in good graces of an administration thats coming in. Maybe they have other business with the administration. So i guess the question is this just the way you get good pr, somebodys basically the incoming president saying this is a great thing youre bringing jobs to this country. But also is it a way to run an economy right now . On that note a few thousand jobs at a time, right . You were talking about some of the other companies that have made these deals with trump whether its on cost discipline or bringing jobs back, lockheed martin, boeing, carrier, owned by united technologies, sprint, theyre all companies that need a friendly relationship with washington. Whether its part of the Defense Budgets or trying to get a deal done past the antitrust regulators. It is your honcertainly does no curry favor and they realize its in their interest to get in there early with the president elect and allow him to take credit for this type of thing because it curries favors with other deals potentially down the line. Right. To put it in perspective, since sprint was acquired by softbank, the company had shed about 9,000 jobs. So you have to keep these things in mind. Of course were talking thousands here when really the u. S. Economy adds, what are the numbers, hundreds of thousands a month . I mean, 150 these days is a weak number because we were getting used to more than 200,000 job creation per month. And obviously whats lost and added in a given month is much larger than that. But it will be interesting to see. Sprint stock as mike noted has moved up dramatically in part after that meeting between trump and masa son, the one at trump tower because of the facts they hope they would be able to revitalize this idea to bring together tmobile which by the way is larger than sprint now, would you want to use sprint shares and some say in fact now some say over value, has huge overhang of debt. A good job of bringing them along and stabilizing the subscriber base, but certainly that deal would help a lot to bail out what was a 20 billion deal for softbank. I dont know. Lets talk about the premise of that deal if it were to happen, right . Bring four competitors, big competitors into three. Right. So its all about efficiencies, its not about enlarging the market, is it . No, it isnt. Mike, you know, i just dont know whether even if you were to have a president who was very much in favor of helping you because youve helped him, the staff at the fcc, the staff at the doj weighing in on a 43 when you can clearly see the benefits to the consumer of having four competitors in that marketplace for something we all use, our wireless phones, that would be a tough one i think even still. But were going to be watching this continued relationship and the growth of that relationship. Lets talk about the political side of this story and bring in john harwood with more. You know, john, president obama under his watch this economy created, what, more than 15 million jobs . And maybe its just trump being a brilliant marketer and more politically savvy than he gets credit for, maybe obama should have announced every Single Company that hired over the last eight years . Well, thats exactly what it is. Its marketing. He took advantage of a slow holiday week and made teased it earlier in the day through sean spicer, his press secretary, and said were going to have this big announcement about economic development, announce it later in the day. As you guys have indicated, masa son announced after his meeting with donald trump at trump tower a few weeks ago that he was going to invest 50 billion in the United States and create 50,000 jobs. Now, this is all part of a fund that he had been raising 100 billion with saudi arabia long before the election. So it wasnt really about trump, but as you guys just indicated, this is a winwin for the companies and trump. They get to come out and say, yes, mr. President elect, were going to add these jobs in the United States. He can say its because of me. Theyre facing regulatory hurdles to sprint and tmobile getting together. And everybodys good, except if you believe the conservative arguments against crony capitalism, which conservatives have been making for some time, you know, will taxpayers get hit in the end . You know, is this back scratching between companies and a politician that will end up costing them . We dont know that. Yeah. You know, its also worth noting, i think, this idea of bringing these jobs back or creating new ones for sprint in terms of call centers, i would just mention separately charter communications, which acquired time warner cable, which also acquired newhouse, they committed to hiring 20,000 people not because they were necessarily trying to do a good thing to get in the good graces of the current administration, but because also tom rutledge, the ceo of that company has said many times actually makes sense to house these people in the u. S. , the inefficiencys that are taken away, the lower churn that we can have from dealing with customer problems in a more effective way is better for us. So worth certainly mentioning. This is a trend in part also. Well, and, david, we have to say, if in fact donald trump has the effect of changing the mindset and having Companies Look first toward jobs in the u. S. , especially the kind of high End Manufacturing that the oneweb executive mentioned on our air earlier today, thats a good thing. And that has the potential to create a virtuous cycle. But you guys put it in perspective before. This is 8,000 jobs in 2016 the u. S. Economys created an average of 188,000 jobs every month. So is this big . No, but it is a pr coup. Now, i want to bring in one other issue. You know, we talked separately from this jobs announcement. We talked yesterday about the split between the Obama Administration, the Incoming Administration over israel and the back and forth between kerry and netanyahu yesterday. Theres another issue that was illustrated last night when donald trump came out and talked to the press, and this was with reference to the Russian Election hack which u. S. Intelligence agencies agree was perpetrated on democratic organizations by the russians. Donald trump was asked whether or not russia should be sanctioned for that hack. Heres what he had to say. I think we ought to get on with our lives. I think the computers have complicated lives very greatly. The whole, you know, age of computer has made it where nobody knows exactly whats going on. Now, think about that. He said we ought to get on with our lives when asked about sanctions russia. Nobody really knows whats going on. 17 u. S. Intelligence agencies have said they think they do know whats going on, and the Obama Administration has them compiling that information to release before he leaves office. That is going to put the squeeze on republicans in congress, especially those like john mccain and Lindsey Graham who are skeptical of russia, skeptical of Donald Trumps relationship with russia skprks were going to have to see where that goes. But donald trump is making plain he has no intention of putting any daylight between himself and Vladimir Putin at this stage. And how that proceeds, how it affects Rex Tillersons nomination for secretary of state, of course tillerson has made big deals with Vladimir Putin, those i think in the end are going to be bigger questions than the ones that we started out talking about with respect to sprint and oneweb. Yeah. With don king by his side. Thats right. John, thank you. John harwood in washington. Meantime, the dow closing down triple digits yesterday for only the second time since the election, jobless claims fell by 10,000 to 265,000. Well get both crude and natural gas inventories later today. We also have trade deficit number 65. 3 billion in november from 61. 9 billion in october. And, guys, in terms of the market move yesterday, mike, we were talking about this in the morning, very interesting to see quite a slew of factors which were a turnaround from the first sort of month of the trump rally. We also saw bonds yields come down, so bond buying. And today were seeing the dollar softening as well. Within the sectors financials the worst performing sector yesterday. So it was quite a marked profit taking post trump rally. The market had been sort of treading water for two weeks for awhile really staying near those highs making these sort of halfhearted attempts at a new high. And yesterday as you say a lot of the forces that were driving the market higher in the weeks after the election did flag a little bit. Dow transports are down from a couple weeks ago. Semiconductors fell yesterday. Were at a twoweek low in treasury yields as well. Seems as if people are adjusting and weve been talking about the possibility of this shift, at least a reallocation away from stocks into bonds just as a mechanical measure because of asset allocators doing that at end of the quarter. We did see evidence some of that was working through the market yesterday. Going to bring up the year end funkiness thats going on. Art cashin has been mentioning this theme of Pension Funds especially this last quarter and this last month having to reallocate buying more bonds, selling more stocks because of the short moves and have to get their portfolios rebalanced. Theres also this idea of window dressing which always sort of comes in at the end of the quarter and end of the year. And you wonder if thats going to boost stocks that have been winners not so much nvidia but you have that short sale call on that. Yes. Probably look out for that final, this is what, this is the final two trading days of the year. Thats right. We did see some evidence yesterday it was just a wholesale very much a shift away from the big indexes and into bonds a little bit. So theres no way to know this for sure or if people are just anticipating that. But i think the bottom line is final week of the year, nobody has a lot of conviction about committing a lot of new capital. And so were sort of left with this treading water. Of course the fact we had three bad januarys in a row at least has to be in the back of traders minds. Im not going to say dow 20k today unless we get within 100 points again. You just said it. You also said that at the top of Worldwide Exchange and then said it ten times in the show. Really . Five seconds you just did it twice. Nope. Thats it. When we come back, apples big push into china excuse me, india, could be paying off. Well tell you why. And shares of nvidia falling again this after that Citron Research report saying the run is over. Its still up more than 230 for the year, but is it time to sell the stock market darling of 2016 . More on that. And taking another look at futures here, a little bit of strength for the dow, just barely. S p futures up 1, nasdaq down 1. This after the s ps worst day since back in october. More squawk on the street live from post nine at the nyse when we return. E, how do you like t . Ooh elmo likes songs puzzs me love puzzle wellpus ara great memorization tnosaurs yess ppies ooh i love puppies so do, i. Actually. Ets teac importanlessons abou so ddancing ay then, lets dance. evebody cheers so ddancing yeah b were opening more Xfinity Stores closer to you. Visit us today and learn how to get the most out of all your services, like xfinity x1. Well put the power in your hands, so you can see how x1 is changing the way you experience tv with features like voice remote, making it easier and more fun than ever. Theres more in store than you imagine. Visit an xfinity store today and see for yourself. Xfinity, the future of awesome. Apples attempts at selling direct to indian consumers may be getting closer to reality. Indian officials are expected to meet next week to assess the incentives requested by the smartphone maker. Goods such as the iphone must be built locally in order for apple to open its own stores. The smartphones currently sold by third party vendors, indias wireless market expected to overtake the u. S. Next year. And it is just behind china, that at least according to idc. Of course china also continues to be something of a question mark as we head into next year in terms of apple and what may or may not happen as a result of the changing nature of the relationship between our country and that country. Maybe one reason that tim cook has been focusing so much on india even though china is clearly a gross buy. Went back to the october call cook asked about india. Heres what cook said. I think its important to look not only at per capita income, which may be what youre looking at, but sort of look at the number of people that are or will move into the middle class sort of over the next decade and the age of the population. If you look at india, almost 50 of that population is under 25. And so you have a very, very young population. Responding to the fact that the population size and some of the demographics match up to china even if the gdp doesnt per se. Well, the demographics are much, much better than china in terms of absolute size, clearly chinas already a more penetrated market by apple, much more growth of course in china to come than the likes of the u. S. , but india much less penetrated and very attractive demographic. So they really want to be there. Theres no doubt about that. It is interesting to see apple playing by these rule say you have to manufacture there if you wanted to sell there in the context of incoming president who would like apple to make some goods here. Clearly apple has to navigate those rules all around the world. I think thats not that surprising. They paid lip service to china over a lot the last year, weve seen that with various investments theyve had to make into companies you wouldnt traditionally expect need to do it, but its worthwhile. Interesting point is timing as you say, is this something thats going to see a bit of a kickback from the current elected administration. Absolutely. Coming up next, we are counting down to the opening bell. Art cashin will be with us to see what hes watching this holiday shortened trading week. Take a look at futures here. Looks like a pretty calm open. No real selling pressure from yesterdays drop, at least right ahead of the open. Well have more squawk on the street from the nyse coming up straight ahead. Wh . [pony neighing] hey gary. Oh im crazy stressedrying to afigu out this cox trerse . I bught in my cfort pony, im crazy stressedrying to afigisnt that right wren . Wellyou could get support om thinrsms inapp ct. Lets u chat share your screirecy with a live person right frome, so you dt need comfort pony. Oh, so what out my tivatialeerk . App chat tnkorswim. With a live person right frome, so you dt need comfort pony. Only at td ameriad see ya next year. This season, start a. Experience the powerf infiniti now, witheases starting at 19 a mth. Infiniti. Por thdriv the dow suffering a triple digit loss yesterday as it extended its well, extends its march to 20,000. Joining us now to tell us if were going to get there, when were going to get there, well, its ubs director of floor operations art cashin. You do have a crystal ball. I know you do. Doesnt feel like its going to be this week. No, i dont think so. As we discussed earlier in the week, the closer you get to year end, the more possibility of that pension Fund Rebalancing taking its got to be happening doesnt it at this point . It could still occur, and it might put some pressure on. The other interesting thing to note, david, was that yesterday the reversal to the downside seemed to kick in just as the dollar was weakening against the yen. So i dont know if thats part of the kerry trade unwinding for year end, but i dont know that it was causative, but it was certainly coincident with the selloff so correlation in terms of currencies in the broader market. Art, do you think i mean, we enter january, weve been talking about the past three have been bad. I mean, is there really a flip of the switch thats going to happen this year again in terms of people just very quickly repositioning . You see kind of some stealth moves under the surface with this sort of people paying a lot to hedge the dollar and all this other stuff going on around the world. Chinas currency a little slippery, but yet oils more calm, credit markets more calm this year than they were a year ago. Yeah, i think so, but you cant rule out the fact were still waiting to find some things out about the new administration. How soon will they be getting some of these programs that theyre talking about . Will they be diverted to look at the judiciary first that some people are saying. Were going to be seeing hearings on some of the nominees even before the inauguration. So if youre thinking of january pivot points, there are a couple right out there that could change things around. Art, thank you as always. My pleasure. Art cashin. And his holiday tie. The opening bell just moments away. So, harris, we have yo fingerpnts on the safe. A photo of y opening the safe. E. A post using the hasag strobbedthesafe so, whatre we suppos to think . Switching to geico could save you a buncof money on car iurance. Excellent point. Case dmissed. Becae saving fen percentor moe geico. Woo because saving fifteen pernt or more on Car Insurance islways a great answer. Youre watching cnbc squawk on the street. And we are live from the Financial Capital of the world. The opening bell will ring about a minute and a half from now as we get set for the second to last trading day of the year. Mike, you were asking art about january, of course, which continues to be a focus now that its just a couple of trading days away. Yeah. And weve had weakness in the last few years. And the question is does something become more likely in the markets because its happened three times in a row and people think its a pattern . Or does it become less likely because people get overconfident they think they know whats going to happen . Its very unclear. Clearly januarys no longer that reliable signal of what the full year is going to be because we have a double digit up year this year when january was a disaster. But does seem we have maybe built up selling going into the new year whether its tax purposes or performance purposes, well have to see. I think a lot of people would look at that chart and say we were due for a 2 , 3 , 4 pullback having nothing to do with dow 20,000. Volumes been pretty low as well. Thats one sense of optimism that moves do get overpronounced when volumes are low. Volatility on the other hand has just started to pick up over the last couple days. Thats something to keep an eye on. In terms of todays moves, europe really resilient today in face of the wall street selloff yesterday afternoon hardly moving. And asia also for the most part in the green apart from the nikkei. Slight encouragement in terms of what to look for in the open here. Look at the realtime exchange. Looks like theyre having some issues there. Come on. Come on. Theres nothing going on. Thats why. Theres the opening bell of course. And here at the big board by the way bank of america celebrating bank of america winter village in manhattans brian park. There goes the realtime exchange. Nasd nasdaq, food bank providing over 160 million free meals to new yorkers. Nvidias down, yesterday, thats a great model. Picture coming out with a report thats short or thats negative, i would assume nothing stops from shorting the stock. So theyre good for ten points already at least. And cnbc to explain it. Of course. Seemed like he might have been waiting to pick a pretty good entry. The stock had gone vertical for quite a while. Maybe you get bang for your buck when the stock looks that vulnerable to a little bit of a pullback. Now only up 215 yeartodate. Though mike noted yesterday in a tweet, you see, i read them, you were making comparisons to 99 and qualcomm. By the way i remember those days on squawk box when we had this qualcomm sound. When it was above 2,000 percent. A stock left for dead, only stock left to own going into by the way, i also looked up in 99 there were 12 stocks up in the na nasdaq 1,000 percent. Yahoo. I dont know, possibly, might have been in 99. So the point being this looks like a very overheated stock, kind of like people say amberelo was, but nothing like emblematic of broad silliness in terms of the overall nasdaq or tech sector necessarily. The theme will continue to be a strong one. Its funny i typically go through my notes i have all over the place to kind of go through things at the end of the year and noticed notes earlier in the year from a Hedge Fund Manager who said keep an eye on nvidia, a. I. Is going to become a much more important theme. I dont know if they held the stock through it. A lot of these guys own it and get rid of it after a month. Quite a move from being considered a gaming chip company to one now so much embedded in this whole theme of a. I. As ilt grows and grows Machine Learning, all the data thats got to come off so they can get smarter. And what kind of competition is there. And also what chunk of the business. I think lucks point last night on fast money is this is still a business where dominant theme is gaming. Right. Bullish on that to get that valuation at this point. And threat of rivals whether its big names like intel or other smaller names to fight back. Even if they dont steal all of the market share, they certainly hit the margins nvidias been performing on pretty impressively. Interesting to see not much of a move in apple. I suppose we wouldnt have expected much off the back of that, but its down fractionally but nothing too meaningful. Some of the health care names are up. Theyre leading the dow, pfizer, unh and merck. Obviously health care is going to be an important one to watch in terms of leadership and lagging, mike. It is still the worst performing s p sector yeartodate. And it is one of the few that is negative. I think real estate is still negative for the year as well. Yeah. But boy did it go down to the bottom of the list with continued ideas about drug makers and what kind of policies were going to get there out of washington. Not to mention any rewrite of obamacare and what that would mean for some of these insurers and hospital stocks. There is actually kind of a simplistic idea buying the worst sector from one year and planning on actually i know of another one, for whatever reason the second worst sector in a given year tends to be a more reliable outperformer the following year, this year would be Consumer Staples. I sort of remember you saying that last year. Yeah, that would be Consumer Staples. Now, of course always when thats the case when you have a laggard sector, somebodys going to give you 14 reasons why its lagged and why it will continue to do so. Thats why you have to basically be kind of a blind contrarian a lot of ways and buy these for value purposes if you think its worth it. You do need to discern, i mean, weve got the drugmakers that have been under pressure, but United Health care insurers have been very strong, one of the strongest components of the dow up almost 35 or so during the course of this year. But it will be of course very important. Rewriting obamacare, what you get there, and then the tax code itself. I mean, i talked to so many Portfolio Managers and number of Senior Executives who are sort of waiting and wondering what are we going to see and what will be this potentially massive overhaul of the tax code. The ramifications for which will be dramatic for so many businesses. I mean, just consider simply the deductibility of interest. That alone will change the Business Plans for a lot of companies, levered companies for example. Will they still allow that . Is ryan going to lead the day . Wheres trump going to be on all this . These are questions we dont have answered but we can expect its going to have hugely important reverberations. And, david, i think thats something that the bankers are particularly excited about as well that could give their stocks an extra leg up. Here im talking more about the Investment Bank parts of the businesses than retail banks which of course have been benefitting from the Interest Rate cut move. Your own interview with john wald ren a couple weeks ago saying it doesnt really matter what the change in the tax code is the fact theyre going to address it and change it is a big positive just to get these ipos and these m a deals moving again because they say it is a big backlog and that kind of thing is incentive to kick start in 2017. Well see how much capital comes back from overseas and what it is deployed with. But again, its also what they allow and dont allow in terms of deductibility that could change the if youre private equity and they actually do go ahead and say you cant deduct interest anymore, thats got to change the whole premise for so much of how you structure a Balance Sheet, right . Yeah. And it really does seem if you take literally what the proposed tax code adjustments are going to be, its sort of this brute force we will force you to invest capital in assets in this country and not do financial engineering. I mean, that seems to be whats behind it. But all of big Corporate America has been oriented in the other way for a very long time. I guess david rubenstein, interested to hear what he had to say, carried interest not so much theyre going to get this lowered interest anyway basically lowered than tax on Capital Gains, so i guess theyre not going to care as much about that. But away from the if we see deregulation of sorts for the Banking Industry specifically, that margin is bad for private equity names because theyve been seen as something within the financial space that have been less regulated over the last decade. Again, at the margin, the Investment Bankers are thinking, great, we can start to take more of that share back from the m a advisory teams of these big names like blackstone. Speaking of m a, another stock to watch here, kate, kate, kate spade, a company ive covered after dow jones the wall street journal reported yesterday bankers talked about selling itself, the stock shot up. This was a 2 billion Company Market cap before this report. And i think for a lot of people who have followed this company and analysts, speaks to a number of things, but it has been seen as a ripe acquisition target. Why . Well, it has a strong brand. It knows its customer. It also has strong same store sales for a pressured retail industry. The problem at kate spade, guys, has been if you follow some of the earnings reports especially lately, the margins have not improved. Theyve been shrinking, profitability has been difficult. Its a company that is mostly in the u. S. And that has all these ambitions of expanding internationally but operationally there are questions about costs and how theyre managing to do it. So a lot of people think it could benefit from being under an Umbrella Company like a michael kors or coach, both companies with cash and have already that infrastructure and international footprint. So a lot of speculation here obviously just fueled by that report. Could be one to watch into the new year. Its gotten cheap. And thats another reason why people say it could be a good takeout target. Accessories has proven a very tough business. You go on these streaks and all of a sudden you have a bad season and the stock suffers. So sub scale 2. 3 million market cap for kate spade maybe needs a larger home. Absolutely. Bob pisanis on the floor with more on what is moving this morning. Bob, good morning. Good morning, sara. Once again, while were fractionally to the upside, not a lot of leadership. And thats been the problem one of the two big problems weve had. Lets look at the sectors once again. Most of them on the upside. Utilities, health care, Consumer Staples, industrials, trying to figure out a pattern . Dont bother. There isnt one. And hasnt been for the last couple weeks. Were getting this reversion to the mean remember people talk about financials, industrials, to a lesser extent energy were market Leadership Groups in november, in the first part of december. That has since flipped around. But were not getting anything coming to the fore thats decisive, not Consumer Staples, not technology, not Interest Rate sensitive groups, nothing compared to the rally we had after the election. Heres where we are right now. Market today stocks, two big problems, no leadership and no bids. Seasonally weak period. Now, weve noted stock volumes particularly on etfs have been weak, however seeing interesting pattern in bond etfs. Theyve been strong. Look at the agg or bnd, that had notably higher volume yesterday, like 80 higher on a day when most stock etfs were 25 to 40 below average volume. This sort of supports some of the ideas that there may be some pension rebalancing going on here where you have to sell stocks and essentially buy bonds here. If you look at what happens in this quarter, weve been talking about this for awhile about big stocks versus big bonds, the s p essentially stocks up about 4 and bond aggregates, bond etfs down about 4 . This would suggest an imbalance between pensions who need to now buy bonds and sell stocks. And weve seen some heavy volume in the bond etfs at this point. Now, dow 20,000 i think a lot of people are now starting to move past that and talk about the 2017 issues. And theres two big issues that are coming up time and again this week. Number one, will High Consumer confidence actually translate into more Consumer Spending . And number two, how will the tax cuts in the fiscal stimulus impact the 2017 and 2018 earnings . These are the two big questions. And everyones trying to develop models that they can plug in with real numbers and get to some affect on the earnings situation. So ive talked about rather than bulls versus bears, the pragmatists versus the optimists. The pragmatists are out saying that investors are wildly optimistic on where the numbers are going. And that a large scale global reflation is going to be unlikely and indeed the action in Global Markets indicate a large scale global reflation is not that likely stocks in europe are down, emerging market stocks have been down. The optimists on the other hand are insisting that Consumer Sentiment and business surveys have been improving rather dramatically. We saw the recent National Federation of independent business surveys show a dramatic improvement in Business Sentiment amongst Small Businesses since the election. Optimists are saying this will translate into higher spending by Small Businesses. And then theres of course the idea that even modest tax cuts could raise earnings 10 or more. There are a lot of studies out that suggest small improvements in tax cuts will translate into 10 and in some cases wildly optimistic 20 improvement in earnings on this the optimists are saying stocks are not overpriced right now. You dont need dramatic expansion in multiples. That 10 expansion in earnings would be sufficient to say the market is fairly priced and not overpriced right now. So thats where were at right now. Final thing to bear in mind about all of this machinations about dow 20,000 is we hit historic highs on the s p and Dow Jones Industrial average in the last two weeks 2277 was the historic high less than two weeks ago on the s p 500. And as you can see here we are less than 1 from that historic high, essentially weve been churning for the past two weeks. Right now the dow up 38 points. Guys, back to you. Okay. Thank you, bob pisani. Now that weve covered equities, lets check on fixed income with Rick Santelli at the cme group in chicago. Good morning, david. Well, rates are melting a bit, but its a rather significant melt because everything escalated of course on november 8th, but also december 14th, the first being the election of course where 10years were in the 180s, theyre currently now slipping under 2. 5. Maybe more important the fed tightening on the 14th. So as you look at a twoday of tens and you see weve dipped under 2. 5, keep in mind we are revisiting the day before the fed tightening. So lets look at a december 13th of fiveyear, its also dipping below a psychologically large area at 2 . 30s, you can see in the same timeframe seem to be a little bit more aggressive as the long end does offer some glimmer to investors of course reaching for a yield at a time where equities are looking better. By the way, the longest maturity of the week will be auctioned at 1 00 eastern, last auction of the year sevenyear notes. Look at bunds you can see theyve melted much more significa significantly. Theyre now hovering over 18 basis points. Should they close in this area it would be the lowest yield close since november 7th, the day before the u. S. Election. And finally, the last chart dollar index may be slipping a little bit like rates but keep in mind yesterday it eked out by one tick, a higher close, a fresh high close going back 14 years to december of 2002. And as you look at this chart since december 13th, you want to pay particularly close attention to this 103 area were challenging right now as im speaking. Wilfred, back to you. Rick, do you think people are buying back into these bonds for a proper investment long term to hold the bonds again because yields have ticked up . Or is it just a short term end of year trade . I think for most of the curve its the former, but i think in particular for the long end its a combination of both. Okay. Rick, great stuff. Thanks very much. Rick santelli for us at the cme group. Lets also check on energy, Jackie Deangelis is at the cnbc energy desk. Jackie. Good morning to you, wilfred. Were watching crude prices just under that 54 mark. Remember, we had to settle over yesterday. Slightly lower on the session. But whats been interesting in the last couple days is youve seen crude go up and Energy Stocks go down. Weve seem to see the opposite happening today. Stocks are telling us maybe weve gone a little too far too fast as the equity market is saying in general right now. But the support were seeing in crude oil prices are saying the shorts are probably out of this trade and youre seeing some repositioning here, some setup for next year for crude prices to go higher. Now, Rick Santelli mentioned that higher dollar index, that should typically take crude prices lower, and its not right now. People are very bullish on crude for 2017. Back to you. All right, thank you very much, Jackie Deangelis. Well, coming up. Before you get ahead of yourself, you wake up and say maybe i should buy this stock at 119, i just came out and said, hey, here are the risks, why cant this stock go back to and i believe it will, where it was 14 days ago . That was andrew left of citron saying nvidia will go back to 90 a share. Of course you can see the stock still about 14 ahead of that, but falling again today. Is the run over for what was the best performer on the nasdaq 100 . More squawk on the street right now right after this. Whenrlpool builds an appliance, but cets sold there ually isnt a way to keep iving that pr today, wrlol can analyze iot sensor data fr connectedpplians on the ibm cloud. So they can continuous learn how customerare using their prodts. And how the machines resnd. Haessing da toak grgrt prodts bter ths whathe ibm cloud is built for. Haessing da toak werwhere, in all thi is the sff thamatters . Haessing da toak weststes a shigh, thi your finances, your future. How do you solve thi you don and, can deliver insight pern antoersofortun500, on what maers to y. Morgan stanley shares of nvidia, Top Performing sent lower by a tweet sent out by citrons andrew left yesterday. He joined fast money last night to explain. Listen. Theres still bottom risks to this business Going Forward. And when i say risk, its really transferring the revenue from where it is right now from gaming to more data center and capturing more of the auto market and its maintaining margi margins. Obviously they have amd coming in, the gaming marvegt right now, if you own the stock, the easy moneys been made. Buying it right here is a bit more challenging. Joining us now is matthew ramsey, Senior Analyst , thanks for joining us, matthew, as an analyst who covers the stock, do you agree with this premise that nvidias rally had gotten overdone and should go back to the low 90s . First off, good morning, happy new year, thanks for having me. Certainly the valuation of nvidia has moved quite a lot with change in fundamentals and perceptions happening at the company. And seen upside and downside pretty wild moves, but i think nvidia has earned the valuation expansion theyve had and i think the point people have really started to argue about their Gaming Business on a go forward basis. And i think the research we have done points to only about a quarter of their gaming installed base so roughly 80 Million Units globally being upgraded to their highest performance really driven average selling prices for the company materially higher. I think its a growth franchise even in their core Gaming Platforms and obviously some of these areas of a. I. Are very intriguing. Well see what happens into next year. Isnt the bull thesis here, matthew, that its about the forward looking sort of businesses of a. I. And Machine Learning and the data processors that has this rally going here . And the question, i guess Going Forward there is, how much competition is there going to be in some of those opportunity spaces . I think those are great questions. I would make two points. First, as i said, i think the Gaming Platform nvidia has tons of growth over the next five years from some of the metrics ive pointed out. But second, certainly youre right, Artificial Intelligence phenomenon that gpus are very well suited for in medical, automotive, data center, Big Data Analytics and other markets, nvidia has growth legs well into the future. So i think theres plenty investors can go after with this company on a go forward basis. If you look at the stocks up 35 for the year and relatively low Semiconductor Growth for a macro, i think investors continue to seek out themes like nvidia that can check three or four of the boxes over the next three to five years and i think that holds valuation. And well see what they talk about at their big gpu tech conference late in the spring with their new voltage gpu and what that can mean for the business Going Forward. Matthew, you know, this sort of rule of thumb is typically that you dont necessarily want to pay up very high multiples for very Cyclical Semiconductor stocks. Do you think theres three to five years visible in earnings thats really going to under in certain markets doi. If you look at the various entry and Competitive Landscape in certain markets nvidia goes after gaming number one where theres essentially one competitor, cpu acceleration where amd is making a move in that market and obviously intel made acquisitions in that space, but i think they have very high barriers to entry in terms of not just computing but the Software Work nvidias been doing for the last five to ten years in those markets. I think a doubling of the companys earnings from today over the next three years is likely. And margins has potential to stay in the really high 60s. So i think there is a longterm secular multiple secular trends that underpin the business. Am i going to argue that the stocks cheap here . No. Well, its not just nvidia, the whole semispace has been hot, hot, hot this year. Well leave it there, matthew. Thank you for joining us. Matthew ramsay of canaccord. Up next, what history tells us about approach to dow milestone. Lets take a look at the markets as we go to break. Looks like a pretty flat open, but we are firming up after yesterdays more than 100 point loss on the dow. Squawk on the street will be right back after this. S s r ur to win, every millisecond matters. Both on the track d thsands of mileswa with the help of at t, redull racing can share critical inrmation abt every inch othe car from virtually anywhere. Bres areetting warm. Confirmed, diel you need tocoo. Giving them the agily to have eed precision. Cause no one knows like at t. Welcome back. Its been 12 days of flooding the dow 20,000, but if history tells us anything we may be close to getting out of this holding pattern. Eric joins us with all of the numbers. Thats right, wilf. 12 trading days since weve crossed 19,900. Yet we havent touched 20k, contrast with how quickly we got the last 100 points closing above the major levels in just a couple days. So these 12 days of crawling now matches what we saw back in 1999. Thats how long it took to go from dow 9, 900 to closing above 10,000. But our close this month is nowhere near dramatic as to what happened back then within a couple days of passing 9,900, the dow closed to 9,997 and fell all the way to 9,625. Seriously. Before rallying back to close above 10,000. That entire round trip happened in 12 days. So those were much more volatile times back then. Our moves now are nothing compared to that. Relatively flat, if you put the two charts on top of each other. So here we are 12 days later effectively going nowhere. History has shown us you either get the last 100 points right away or you have to be really patient. Its obvious now which situation were in. Back to you guys. Thank you very much, eric. Coming up, vice chairman of Kissinger Associates bob hormats going to join us in the next hour. Squawk on the street continues after a short break. Good morning and welcome back to squawk on the street. Im sara eisen along with david faber and wilfred frost. We are live at post nine at the new york stock exchange. Carl has the day off. Lets take a look at markets bouncing back just a little bit in thinned out holiday trading. The ultimate day of trading of 2016 dow rebounding just a bit, 3m and home depot interestingly adding the most points to the dow. S p 500 is up a little more than a tenth of a percent. Wti crude though not helping in the rally. It is just below 54 a barrel. Our roadmap today starts with president elect donald trump announcing 8,000 jobs moving to america as part of softbanks investment in the u. S. Weve got the details and analysis straight ahead. And the trump rally taking a bit of a pause. Markets limping to the finish of an otherwise upbeat year. Will we make it to dow 20,000 in the final two trading days . You said you werent going to say it again. There we go. Plus, new year, new you. Well speak with the ceo of planet fitness, how new years resolutions may boost his companys bottom line. President elect donald trump announcing yesterday that sprint and the Satellite Company oneweb will bring roughly 8,000 jobs to the u. S. As part of a pledge by japans softbank to invest in the u. S. John harwood joins us now from washington who has been following this story along with us back here. John. David, they werent exactly new jobs, as you indicated, masa son had announced the existence of those jobs several weeks ago. But when youre in a slow holiday week and youre about to become president in another three weeks, why not claim credit . Thats what donald trump did last night. Take a listen. I was just called by the head people at sprint and theyre going to be bringing 5,000 jobs back to the United States. Theyre taking them from other countries, theyre bringing them back to the United States. And masa and some other people were very much involved in that, so i want to thank them. And also oneweb, a new company, is going to be hiring 3,000 people, so thats very exciting. Now, the president elect was also embroiled in two different Foreign Policy issues yesterday. The first was over israel and that u. N. Resolution that the United States did not veto. We had a war of words yesterday between u. S. Secretary of state john kerry and israeli Prime Minister benjamin netanyahu. Donald trump sided squarely with netanyahu and said the policys going to change on january 20th. But there was also the issue of russia and its hack of the u. S. Elections. Donald trump was asked whether russia should be sanctioned last night, and he pointed not to russia but to computers themselves. Take a listen. I think we ought to get on with our lives. I think the computers have complicated lives very greatly. The whole, you know, age of computer has made it where nobody knows exactly whats going on. Now, the Obama Administration and u. S. Intelligence agencies are in fact pointing squarely to russia. They think they do know whats going on. The Obama Administrations assembling the information behind that hack. Its going to make it 3ub u public, or says it will make as much of it as possible public before donald trump takes office. And thats going to increase pressure on republicans in Congress Like Lindsey Graham, john mccain, who were skeptical toward russia and skeptical toward Donald Trumps position on russia. Potential issue for donald trump with this new republican congress, which is otherwise very friendly to him. Yeah. Interesting, john, to watch this. I wonder how long i mean, obviously you dont know, but what is your sense in terms of trumps willingness to continue to talk about 1,000 jobs here, 2,000 jobs here, 3,000 jobs h e here . Is this something were going to hear about time and again throughout his administration . I think four years of it, david. But the difference is that now were in a period of where attitudes moods are good, Consumer Confidence is up, markets doing well, were still waiting on that 20,000. Well see if sara gets satisfied with her answer today. So donald trump can try to feed that by statements of this kind. But reality has a way of hitting you in the face when youre president of the United States and things go wrong and economies change and turn. And so some of the tactics that work well in one set of circumstances may not work well in a different one. But if donald trump can avoid a recession in four years and have announcements like this every day, well see whether that works. More power to him. You wonder how many jobs, david, can be created. We just got jobless claims numbers in this morning, down another 10,000. Fewer and fewer americans filing for first time unemployment claims. Theres a debate in economics about whether were in full employment and especially if we see more m a. You just wonder where those jobs are going to come from. Its true. It will be very interesting especially on part of m a focused in part creating efficiencies that come through job losses synergies. Well, thats beyond revenue synergies, exactly. But john, thank you. Lets bring in bob hormats now, vice chairman of Kissinger Associates, foermer undersecretary of state for Economic Growth, energy and the environment. Bob, im just curious as to what your take is here in these transition days in terms of these kinds of announcements were getting from trump about keeping jobs here, bringing some back, even if theyve already indicated they might have been brought back. You know, progress indicates that were going to have a lot more automation and a lot more job losses far in excess of 5,000 here or 8,000 there. What are your thoughts . Well, i think, david, thats right. I think basically what were trying to do is to create jobs in this country, but we also have a lot of new technology which is being brought onboard. And a lot of the technology while driving growth does not create a lot of new jobs. So thats the dilemma that you have today. Most of the job displacement is not from imports, its from technology displacing old jobs. The numbers are quite overwhelming in that respect. Yeah. Another area of course that the president elect though is focused on is china. And i mention that to you, Kissinger Associates of course the key being advising companies in terms of their doing business there, what is your sense again early days but clearly seems as were going to have a different relationship between the u. S. And china. Can you put it in some perspective for me . What are you hearing from your clients as well in terms of their expectations . Well, i was actually just in china for ten days a week or so ago. And i think there are a couple points we should note. One, trump wants to bring jobs into the United States. Well, china is a growing and increasingly large investor in the United States. So hes got a dilemma there. On one hand hes concerned about Chinese Investment in the u. S. And members of congress have expressed concerns. On the other hand Chinese Investment does create jobs here. Obviously theres chinese competition in the United States market. Weve seen this over the course of years. Trump clearly and his advisors around him clearly have some idea about taking a tougher line on trade with china, which trump expressed during the elections. The question is that a negotiating tactic . Does he actually plan to do this unilaterally . What are the chinese going to do if the United States does take such actions . And what will be the impact on markets . We havent really talked so much about that, but a big trade war between china and the u. S. Would affect both countries but have a major affect on financial markets. There are a lot of things that i think the trump people ought to think about very carefully before they take action. They can use it tactically, and they might, but they ought to think through the implications, what you do on day two, day three and day four. And what the chinese do in response. The chinese are not a small economy. And they have consequential things they can do. Can you just elaborate, bob . I mean, youre the expert here. What does a potential trade war between the u. S. And china look like . And who has the upper hand . Well, i think in the end both sides are going to be disrupted if there were a trade war. The fact is that on trade we talk about checks and balances in the United States. In fact, the congress over the years since the early part of the last century has given the president a wide degree of authority and discretion to impose trade barriers of various sorts for various reasons. So the president could decide that the trade imbalance requires him or induces him to take some tough protective action that he will take action to restrict Chinese Investment in the United States if chinese restrictions continue on certain american investments. He could do a wide range of things. Its very hard to predict now. Hes said tough things during the campaign. What hes planning to do actually is very unclear. And he planning to negotiate a tough deal with the chinese and simply dangle these threats in the background, or is he actually planning to unilaterally use them and then say, well, come and negotiate with me . In any case, the consequences are first of all, a lot of importers particularly walmarts and others buy a lot of chinese goods because americans buy them and they get them cheaper on the shelves of these stores. What happens to the price of those items . What happens to the large number of American Companies that are selling in china whose profits depend heavily on it . Its too early to predict with any precision, but if you were to get into a trade war with threats on trade, on investment, on, then you would have a lot of disrupti disruption. I would say the cautious and right strategy for the moment is think through carefully what you plan to do, dont do it by tweets but have your negotiators and the chinese sit down and try to work these things out before you take action. The chinese are not particularly keen on being threatened, and probably are going to be very reluctant to act under over threat or particular series of actions. If he wants to be tough on china, he should talk to the chinese in a negotiating environment and not do it through tweets. Well, bob, more broadly what do you make of some of the cabinet appointments . Fairly heavy do you think thats going to work . And also on the case of these appointments getting approved, could there be bigger delays than we expect . In the short term hard for the Trump Administration to kick off on day one . Yes, those are very good questions. Ive had to go through confirmation process twice. It takes time. I think the some of the people hes picked a very qualified people. Elaine chao, wilbur ross, Steve Mnuchin i worked with at goldman sachs, there are a number of very talented people on the roster. And numerous others at the cabinet level and the sub cabinet level. And then there are those who perhaps have almost no or no government experience going to have to begin to understand how the government operates if theyre going to be successful how to work with congress. It just doesnt come to you. You have to spend time working the process in washington. This is a democracy, you have to work with both sides of the aisle. And you have to get a lot of members of the cabinet together and a lot of your staff together to organize things. In terms of the delay, thats a very valid question. It takes a lot of time under the current rules. First of all, you have to divest yourself if youre other than the president of virtually all your holdings unless you hold Treasury Bonds or very widely diversified mutual funds. And when you sell these assets, you do get the benefit of not having to pay cap gains. On the other hand, in order to get that benefit you have to put your assets into broadly held mutual funds or broadly held etfs or government securities, that takes a lot of time particularly if youre a person who owns a lot of private Equity Investment and you have to unwind that. That takes a great deal of time. You have to have a lawyer probably or accountant. You have to report to the congress and then you have to have your hearings. They take a lot of time to schedule. Cabinet members probably wont take too much time. But then they ask you a series of questions, what they call qfrs, questions for the record. That takes weeks and weeks to answer those questions. So the confirmation process can be very long and very difficult. And for people with a lot of money, very complicated. All right. Spoken like somebody whos as you said been through it a couple of times. Bob, thank you as always. They can call me up, i can give them advice, tell them how long it takes. All right. Bob hormats joining us. Thanks. Sure thing. As we head to a quick break, take a look at stocks at this hour. Youve got a mini rally going on. The dows up 26 points, reversing just a bit that triple digit decline yesterday. S p 500 up one, nasdaq still barely negative. Two trading sessions left, will we hit that historic dow 20,000 mark . Were more than 100 points away. Plus, doing business and announcing jobs in the trump era. Former medtronic chairman and ceo bill george will be joining us with some tips for ceos. Much more ahead on squawk on the street. Stay with us. 2016 is coming to a close and weve slipped further away from dow 20,000. Yesterday saw the only triple digit move to the downside for the dow second since the election. Joining us now to discuss where we go from here is hank smith, cio and aaron coally, bmo investing rates strategist. Hank, you are bullish on this market and expect 7 to 10 returns next year. What keeps it going . And does that mean that there are going to be bumps along the way say now until january until we get there . Well, there are always bumps on the way. What keeps it going are corporate earnings and the absence of a recession. Bull markets dont die because of age. They dont die because of geopolitical almost always in anticipation of a recession. I think that is a fairly safe forecast for 2017 that there is not going to be a recession materializing even well into 2018. So therefore this bull market goes into the eighth year and continues. And we think without any p e expansion you can get a 7 to 10 return just based on s p 500 profit growth. Hank, at the same time markets are forward looking and weve had quite a few years of growth already unemployments already pretty low and weve had a very strong run up both this year over the last seven years and this quarter, which doesnt provide much room for further growth in the market. Well, i would say, wilfred, that is a risk if we get a return ala 2013 of 30 , youre going to have a real valuation problem. But i think with relatively low inflation, relatively low Interest Rates, a 7 to 10 return for the market still keeps you in a range of a fairly valued market. In this economy, despite being 7 and a half years old, were getting a mid to mid late cycle uptick in the economy. Thats very rare. And were starting to see facets that have been a headwind such as Business Investments pick up. And so we could be looking at finally an economy approaching 3 by the end of 2017. That will be healthy for the markets. So, aaron, were looking at the tenyear yield right now. 2. 46 is the low, if hank gets the economy and markets he wants, what does it mean for Interest Rates in terms of Economic Outlook and how high yields go next year . I think theres a very good risk that if you start to see growth of the type that hank is talking about, you could easily see tenyear yields push towards 3 . Although thats really not as much our base case. I think our view is that youre likely to see a lot of that punctuated with very significant rallies that yields are likely to kind of stabilize around 2. 70. Whats been great so far for the fed inso far for rates, one of the reasons the real economy the growth hasnt gotten hit so much from the increase in rates is that inflation has been rising as well. And as you get closer to the end of the year to answer the other part of your question, youre likely to see the fed focus more and more on that and what it means for the Economic Growth as we approach the end of or at least one of the longer periods of expansion that weve seen in the last several decades. In terms of fiscal stimulus that we might see next year and possible deregulation, do you think the markets over optimistic on that front . Absolutely. I think the markets have priced in a good deal of that. Weve seen estimates ranging anywhere from 0. 3 to 0. 8 of gdp growth on the back of those estimates. If theres any sort of hitch or political issue, if any of the extreme political projections weve been talking about either a trade war or any other conflict starts to arise, i think you can see yields drop quickly. Weve also got a market thats very short. I think investors have broadly bought into that belief that rates are going up. And as a result theyve been willing to bet against the market quite easily. And that gives you the potential for a very strong rally if the right spark emerges. So, hank, add it up for us in terms of how your portfolio looks, in terms of sector exposure. Youve got a bullish case on the economy and the markets, does that mean you want to be in financials and industrials and some of the other winners from the trump rally . Absolutely. I think you still want to be balanced. Part of the trump trade is what has not worked and Consumer Staples is an area thats seeded ground here. And youve got some wonderful opportunities with very generous dividend yields in that sector. So i think you still want a balance between offense and defense, financials, industrials, but also Consumer Staples and health care as well. We would avoid utilities, the strict yield plays we think are going to be challenged Going Forward. Well, theyre doing well right now on this yield move that were seeing today. Well leave it there, thank you for joining us to talk next year hank and aaron. Coming up, a tough year for emerging markets. The eem etf underperforming the s p 500 by more than 12 in just the Fourth Quarter in itself. We break down whats in store in 2017 for emerging markets coming up next. Assion. Bui keep it growingby making ev. Thats why i have the spark sh card from capital one. With it, i earn unlited 2 cash back on all of my purchasing and that unlimited 2ca back from spark means which ds fuel tolars each year my btom ne. Into my business. Whats in your wallet . Whaa baskballosts 14. Ng like . Whats team spirit worth . cheers whwhats t value o o taa walk in the woods . The vae of capital is to create, t just wealth, but thin that matter. As 2016 draws to a close, cnbcs breaking out the playbook for 2017 looking at ways you can make money in the coming year. This hour seema mody has a close look at what to expect from emerging markets in 2017. 2016 was a banner year for emerging markets, that is until the election of donald trump who was cast a cloud of uncertainty over emerging markets. No matter which policies come out of trumps cabinet, expect 2017 to be a challenging year facing tough headwinds from rising Interest Rates and a stronger dollar. Here are three predictions for the new year. If the president elect goes forward with protectionist trade policies and a tariff on foreign goods, it would likely threaten some emerging Market Countries competitive edge. As a destination for cheap labor, specifically china with analysts forecasting a nearly 4 decline in the worlds second largest economy. The other country likely to get hurt is mexico, which is a big trading partner with the United States and has already been hurt by the depreciation in its currency, the peso. One bright spot in the emerging world, russia. Rising oil prices and a friendlier relationship between trump and putin could draw more investors in. Hsbc echoing that sentiment calling russia the cleanest play in emerging markets next year. Well, we should point out that russia has already been a favored destination for investors in 2016. In fact, the rts, which tracks russian stocks, is up 51 yeartodate making it the best performing major Global Market this year. Sara. Sort of a surprise winner. What did you say, seema, about the chinese growth forecast . What are economists looking for there next year . I think we expect growth to stay steady in 2017, but again, a lot of it is riding on the potential trade policies that are coming out of washington once trump enters the white house. That of course could have a detrimental impact on chinas economy. Some people are saying that protectionist trade policies plus that tariff could potentially result in a 3 to 4 decline in chinas gdp. Of course thats something were going to watch very closely next year. Wow. We certainly will. Seema, thank you. When we come back, the president elects jobs announcement and how businesses should be preparing for this new trump era. Harvard Business Schools bill george weighs in. Much more ahead on squawk on the street. The dows up 26 points. I just wanted to thayou for walking me thrgh my first optio trade. Wenldo it for evyone gary. Well, i elretty smt. Ll, werall about educating wpelwell, t rry, strategies. I wot let this accomplishment go to my hd. M ilthe same old gy. Wait, u forgot ur french dictiona. M ilthe same old gy. Oh, mucho acias. Wait, u forgot ur french dictiona. Get he on options trading with inkowim, only at td ametrade. You got it if youre ing to wish, wi big aths december tot up to 500 customer cason sele016 an2017models for. Se lexuseale good morning everyone. Im bill griffeth. Heres your cnbc news update this hour. A new ceasefire agreement has been reached on syria, Vladimir Putin saying the deal is backed by both russia and turkey, who have supported opposing sides in that conflict. The ceasefire begins midnight local time. Meanwhile, u. S. Senators are visiting Eastern Europe promising a round of tough sanctions against russia over its interference in the president ial election. Republican john mccain called moscows actions a threat to democracy. And nbc news is reporting that the white house will release details of those sanctions as soon as today. Cars with even numbered plates are being banned from madrid roads today as that city looks to curb rising air pollution, which has risen above European Union limits. The restrictions will switch between even and odd numbered plates until the air pollution dissipates. And fans in hollywood are remembering screen legend debbie reynolds. Visitors brought flowers fo her star along the walk of fame as well as her dance studio. Ms. Reynolds, who was 84, died just one day after her daughter carrie fisher. Thats our cnbc news update. Lets go over to Jackie Deangelis for the highly anticipated eia inventory report. How does it look, jackie . Good morning to you, bill. The eia reported natural gas withdrew 237 billion cubic feet. Its a very large withdrawal. Five times greater than last year and fiveyear average is around 80 billion cubic feet to give you a sense of context. The largest ever draw was 14240. This was a highly anticipated report. Its largely priced in. We were trading at about 381 before, so weve recouped some losses trading at 3. 85 now. But right now the expectation is that colder temperatures are going to continue to bring the demand forward as we head into the rest of the winter heating season. And i would say this, stocks were total stocks that is were in great shape 4 trillion cubic feet not long ago. Were now closer to 3. And people start to get worried when we get at those levels and theres still a lot of winter left. Back to you guys at post nine. All right, jackie, thank you. The president elect announcing that sprint will be bringing back 5,000 jobs to the u. S. And create an additional 3,000 jobs from oneweb. Its the latest of Donald Trumps calls to companies to bring jobs back home to the u. S. For more on the new trump era Business Leadership and a trump america, were joined on the phone by former medtronics ceo and cnbc contributor bill george. Bill, thanks for phoning in. Thank you. So theres one question here, and that is does donald trump deserve credit . He is taking credit for bringing these jobs back to the u. S. , what say you to that . I think the real story here is masa son who is a very, very astute entrepreneur, the number one entrepreneur japan has ever had, hes worth 19 billion. And he took the initiative with president elect trump back in early december and promised him 50,000 jobs. These 5,000 from sprint are the First Tranche of that. I think the oneweb he owns hes invested there and i think thats probably another 3,000. But its good news. I mean, we can only say its good news. I think son is a very creative, brilliant entrepreneur. He has one idea a day. And japans never seen anything quite like him. I think its great. So President Trump is naturally going to claim credit for every opportunity he gets to create jobs. Thats his mantra, and its good news for the country. Maybe hes giving us more hope. I cant be negative about anyone thats going to come in and create jobs. Substantively i think theres a lot more we need to do long term. But in terms of short term, but this is old news. I mean, this was announced back in december around the 10th. Well, the other question that raises is what is masa son and softbank getting out of it on the other side. Clearly it doesnt hurt to have a friendly relationship with the new administration, but this is someone whos tried to get a big deal done, sprint and tmobile failing because of u. S. Antitrust regulators. Well, i think i met with masa back in june. He didnt reveal all his strategies, but i think hed like to still get that deal done. Marcelo claire is doing his best, but not as large as they need to be compared to at t, verizon and the merger with tmobile and u. S. Would give them more clout and ability to compete. Certainly he has that in the back of his mind hes u hed like to get that done with a series of negotiations and promises. And i think youll see something happen during 17 if that will come back on the table, i dont know, no ones told me, but thats what i think will happen. Bill, more generally, do you feel that the next administration is going to be pro or anti m a . Clearly there was some rhetoric on the campaign trail that was against certain deals, but that was sort of opportune timing if you will and clearly changed his view on certain parts of his Campaign Rhetoric since being elected. Do you think hes going to be pro m a in the way hes generally pro business . I think hes going to be pro jobs. And if these jobs are if the m a is seen as reducing jobs, i think it wont be positive, but seen as creating jobs in the u. S. , i think youll see him being very pro m a. You can go too far with that when you see the number two and number three in an industry combine like youre seeing among the health plans, there are lots of questions about that. So i myself have reservations about going too far. But i think if people are really committed to growth, i think thats the question. Or are you just doing parallel mergers to shrink . The at ttime warner deal, you know, to me is a parallel deal. Its not just i mean, its a different kind of deal. And i think they are committed to growth. I think thats the question. Right. You know, bill, you made a veiled reference to this and, listen, like you, everybody applauds any job is good to have come back to the u. S. Or to be created. But we are dealing with automation certainly as a key issue. Robotics. So many of these things, ive mentioned them many times, but youve run a company thats taken advantage of this when it comes to surgery for example. I mean, these are the things i would assume youre referring to when we talk about the big herb biggerish sh issues when it to performance. Getting the skills, germans have done that, why cant the americans do that . Weve got to get more young people going into the system and take mid career workers and retrain them. The running robots for running Machine Tools or running 3d printers or running very complex equipment for computer graphics, there are millions of jobs unfilled. Some 6 million jobs are unfilled today because we dont have qualified workers. And companies will naturally go outside the u. S. To find people to fill those jobs. So thats the big job. But that take longer. You dont do that with a few tweets and just short term thinking. Youve got to make a massive commitment to do that. That to me is number one issue in creating jobs for the future to have American Workforce that has the skills wed noo. So, bill, whats the takeaway . Whats your advice to ceos that if they have any hiring plans at all they should be calling the president elect and telling them and saying thank you, im going to be hiring in the u. S. . Well, i think they probably should, but remember theres a carrot and stick approach the president elects using. So you saw that with boeing and lockheed. I think we have to be pretty careful. I think most are trying to stay under the radar screen. But i think ceos should be investing more and training their workforce and working with local colleges and institutions to do that. Thats the number one thing. If they have the workforce for the future, the Silicon Valley folks are very concerned about that with Artificial Intelligence and all the automation thats coming. Its going to come. And its a good thing. And that creates other kinds of jobs, creates office jobs. So the old time factory jobs im not sure are ever going to come back to the numbers we saw before. Yeah, were going to see if those jobs of the future can be created in an environment where its america first. Bill, well leave it there. Bill, thank you. Bill george, harvard university, former medtronics ceo and a cnbc contributor. Sticking with the Incoming Trump era, a new administration is going to mean perhaps a big change in taxes. Cnbc. Coms personal finance and Consumer Spending reporter kelly grant joins us now. Some tax tips for the year ahead, we dont know whats coming but we can assume there will be changes to come to personal returns, not to mention corporate which we talk about here a lot. Thats true. We dont know a lot of whats coming, but one of the year end moves advisors are talking to consumers about now is make sure youre getting and taking advantage of the losses which could be less valuable next year if some of these changes in cuts go through. Make sure youre offsetting those gains taking that extra 3,000 deduction against your income. After that of course you want to be thinking about topping off your College Savings accounts. Its one of those moves that goes kind of under the radar at this point in the year, but it can be pretty valuable. Youre not going to see a federal tax break there, but you are going to get some extra tax breaks from the state. More than half of the states actually do offer some sort of a credit, a break might be an extra bit of matching money or scholarship funds down the line. And then a third thing you want to look at just a regular year end tax tip, get that fafsa in. We saw an earlier start date this year and a lot of families are taking advantage what were hearing from colleges theyre getting that money in even if you dont think youre going to qualify for needbased aid, a lot of states and colleges are doing first come, first serve on merit aid as well and youll need the fafsa in to take advantage of that. Head into next year with some people expecting tax rates going to go down, Capital Gains may go down, is there anything you should be thinking about now . I mean, i guess some people can try to defer income if possible if they think theyre going to be paying less in it next year. A lot from advisors is defer any income you can take and try to accelerate any deductions that you can take advantage of this year that that could be more valuable. All right. Thank you. Thanks. Were going to need you in the new year. Going to be confusing. Right. As we head to a quick break, take a look at shares of mylan rising after the drugmaker launched generic version of allergans zovia, drug used by women to prevent pregnancy. Much more ahead on squawk on the street. Mylan up 1. 3 , market just above flat for this hour. Nothinintimidas janelle. Not boys. T worms. Not cancer. I nt you on my team. Ok. Janelles doctors turned to st. Jude childrens i nresearch hospital where weve helped increase the overall Childhood Cancer survival rate f20 80 . We will not stop until we hit00 cancer, ure going down. And jalle, youre growing u donate now at stjuderg orhowhere see the. Jude logo. Welcome back. Now lets get to the cme group. Rick santelli with the santelli exchange. Rick. Thank you, wilfred. Like to we can my second to last guest of the year, jim bianco. Ill take it. There we go. Jim, for 2017, two issues i would like your opinion on capital outflows from countries like china and the European Union. And, b, how the world of passive investing in etfs may harbor some secrets for 2017. I think youre going to see capital outflows from europe and china and would largely be a beneficiary to the United States. But within that the bigger storys going to be capital outflows out of china. Let me be blunt about this, chinas biggest problem in 2017 is going to be wealthy people leaving, leaving with their money. China cannot talk about that. No one can talk about that because theres been reprisals in the country for the last 18 months any time anybody brings that story up, but its clear even in todays the wall street journal where they had a story about wealthy people trying to get their money out. Theyve lost confidence in the government. They wont say it out loud because of reprisals, theyre just leaving. Thats going to be the big story for china as we work through the year. Now, does that mean we could still have a january in 2017 like a january in 2016 . Or does history not repeat itself just because china has a problem . History repeats itself. Lets call what the first week in january usually is. The first week, the first day of the year, tuesday, usually one of the most volatile days of the year. You could see a several hundred point move in the dow. Now that i said that, the question is which direction. The last couple years its been down, but theres been other years where its been up. I joke to you off camera, you could see dow 20,000 21,000 two weeks from each other. Dow 20,000 and 19,000 within two weeks. Thats what to expect within the first couple weeks of the new year. You know, being kind of a contrarian at heart, i think many do believe theres a repeat of january. They dont believe in the current 1,600 point rally although its a bit less now. If we dont see something diabolic in the markets in the first couple weeks in january, could that end up being a real catalyst for more of a surprise move to the upside in stock sns. I think so. I think a lot of people remember the last three januarys, especially last year. We came out of the gates and just went straight down. And theres a little bit of a fear that thats going to happen, especially after yesterdays selloff. And youre right, if we can get to around the 15th of january and we still have all our fingers and toes and we havent gone bad, then you can probably see a little bit more excitement come back into the market. All right. Lets finish up with our last three quarters of a minute or so, etfs, a lot has changed there. Passive investing is king, but there are issues you brought up some of the issues we learned during the energy crisis. Quickly, how could etfs be a real fundamental story for stocks in 17 . It retards the capitalist system of giving money to good ideas taking away from bad ideas. Went to 80 by early 15. Everybody said thats going to be painful. Youre going to see production shutdowns. You didnt because a lot of the Energy Companies found that through passive investing they could issue secondary stocks or bonds to those kind of companies. So you had to pull the price of oil way lower than normal to shake it. To 26 because they kept finding funding through the indexization passing people. So Pay Attention to how investors and etfs act with regard to longer exactly. Jim bianco, thank you. Sara, congratulations on the wildcats. Back to you. Oh, thank you. Yes, they won. I did get an email about that. Rick santelli, thank you. And congrats to you as well, youre in chicago. I like the glance to me as to check. Pinstripe bowl, thats what they won. Yes, go wildcats. When we come back, new years resolutions may mean big bucks for the Fitness Industry. Well be joined by the ceo of planet fitness. Wilfred eager to get some tips. Theres me in this video. There we go. For the new year. Much more ahead. Stay with us. Welcome back. Planet fitness taking over times square for the second Consecutive Year this weekend to ring in a judgmentfree 2017. The ceo at planet fitness, chris, thanks for join us. Thanks for having me. How big a boost does it mean . Is it significant in terms of the numbers you see and how long does it last . It lasts through april. But january is the big one. New years resolutions, wellness and health is usually the big one, and new years eve being it will sponsor is big for us. 87 of the u. S. Population doesnt have a health club membership. With our affordability and atmosphere its top of mind coming january 1st. Does it drive new subscribers to take um membership or your existing members come and use the gym more regularly for those two or three months . Its both. More use and more joins, which is good as well. Come spring, you get spring fever, people start to work outdoors, kids have Outdoor Sports and usage drops offer a little bit. Do you have that space for extra usage of members . Some of the criticisms analysts have, 8. 7 million members so over 7,000 members per gym. Thats very high. It is very high. Do you have space to allow them to come back in . So our usage, were open 24 hours a day at most of our stores, so usage is spread out. Theyre big stores, 20,000 square feet, up to 100 pieces of cardiovascular equipment, which most members use, a lot of circuit equipment. Theyre not coming in for the big balloon classes so were able to service a lot of customers. If we think about the themes that have driven the fitness injury, the cycles, trendy new ideas and with it also a lot of obsession with younger people about Fitness Trends coming up on instagram, its quite image based, you guys dont really go for that part of it, judgmentfree zone one of your things. Does that make it harder for you to make the most of the newer trends that you see in the Fitness Industry . I think when all this excitement comes around, whether its wearables or soul cycles, when tides rise, all ships rise. Its good for the industry and americans in general. 80 of the l population doesnt work out. To start with a high fee and boutique, a lot of exercises are more difficult. Come as you are, first timers well show you the ropes. The other thing in our industry is a big trend in duel memberships, which is great for us because you might pay for that higher price boutique experience but you want to do a cycling class every single workout and they supplement with a 10 membership like ours to do the cardio or circuit training. What are you seeing in terms of trends of how many people who have signed up actually come work out regularly . Its about 50 of our members come within a 30day period. So theyre very episodic. They come in, come out, get busy with life, they come back. Luckily at 10 a month, if they miss a month for the summer, they come back in cement when the kids go back to school and they get back into the regimen. What are your plans in terms of expansion next year . More gyms opening and whereabouts the locations, just u. S. . U. S. , canada, and the Dominican Republic today. Well open about 200 a year. 90 of our units are opened by the existing franchisees so, its not a onesie twossie system, theyre opening their 10th or 25th store so theyre excited about the brand and moving forward. The stock has done well. Talked to you one year out from the ipo and i guess one of the risks that come up from the Analyst Reports is that competitive environment. You mention its good for you, but are gyms across this country growing at both the value end and the high end . I think the wellness trend has changed. It changed the last couple years. Acceleration of that has been very dramatic compared to 20 years ago when i started this. And you think about the wearables, all the farm to table restaurants, good eating, no gluten, all these thing, the general trend in wellness has accelerate sod rapidly its great and more people are joining gyms and getting healthier. Chris, great stuff. Thanks for having me. You didnt show your fitness tip. What is the main one . The main one, consistency. People get fit fitness as a crash diet, no. Two, three days a week, stick with it forever. Im going to take that on board. Sara suggest ld i needed to lose weight. Point taken. Advice noted. Chris, thank you very much. Thanks for having me. We all need to tone up in the new year. Coming up on squawk alley, former Indiana Republican representative and club for growth president david mcintosh, his new take on the president elects new jobs announcement and the economic road ahead. And looking at stocks at this hour, weve lost a bit of steam. The dow now down about 7 points. S p flat to negative. Art cashin is watching the dollar. It is weakening further against the euro and the yen. That dollar and stocks have been marching hand in hand. Both moving south today. Much more ahead. Stay with us. Miles per hour. Raveling ov 200 to win, every millisond matters. Both on the track and thousands milesway. 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We could be looking, if we continue this sort of downtrend, at the first down week in eight. Were coming off seven strong weeks for the dow. Exactly, but for the quarter as a whole were still looking at about 9 of the gains, the dow, s p, and nasdaq a little behind that. But its been a strong quarter. Little bit of profittaking, not something to be too worried about. We are now solidly more than 100 points away from dow 20000. Art cashin doesnt think were going to hit it this year. Weve pulled back away from that number after getting as close as 13. A day and a half left. Now to Jackie Deangelis for a check on the energy inventories. Hey, sara. Just waiting for the department of energy to release that data right now. The an api gave us a build last night of 4. 1 million barrels. That was expected. Traders are looking for a draw of about 1 1 2 to 2. Crude prices are pretty much trading flat but holding over the 54 mark. The doe is out with that number. Its a build of more than 6 million barrels. Thats actually bearish for crude oil, but none of the bearish factors are having an impact right now on this trade. You can see were actually just trading a little higher here. Whats interesting to note is that the short squeeze probably is done. Were looking at a trade right now where people are repositioning for the new year. Theyre bullish on equities. Theyre bullish on crude oil. And theyre setting up for that move that weve talked about to about 60 bucks. Kayla back to you at