comparemela.com
Home
Live Updates
Transcripts For CNBC Squawk Box 20180119 : comparemela.com
Transcripts For CNBC Squawk Box 20180119 : comparemela.com
Transcripts For CNBC Squawk Box 20180119
Look at the green arrows back this morning, even though the government could potentially be shut down. S p futures up by 4. 5. The nasdaq up by 19. Well talk more about that potential
Government Shutdown
in a bit. Overnight in asia, the nikkei higher. Up 0. 2 . Hang seng up by 0. 4. So was the shanghai in china in europe, at least right now green arrows across the board. Biggest gainer of the major averages is the dax, which is up by almost 0. 9 percent. The tenyear yield hitting 2. 64 yesterday. Thats the highest level since september of 2014. Again, concerns about the
Government Shutdown
really pushing things well see what happens to the tenyear when and if a budget deal is found. Right now it looks like its setting in at 2. 63 . Some big headlines this morning. Ibm returning to
Revenue Growth
for the first time in five years. Shares are down. Theres weaker than expected guidance overshadowing that news the company beating on the top and bottom lines but took a charge of 5. 5 billion as a result of the next tax law well talk to an analyst about this at 6 30 a. M. This morning what was your line even trump i was kidding if ginni heard that, she would be mad after working so hard so long to get it to a revenue gain and to attribute it to a macro government you know what tax rate for the quarter was 6 . Which is kind of a common thing with the difficulties. The stock is called down its gone above almost back to where buffett was buying it people soured on it. But its had a good run recently with the entire stock market amazing that the big the sophisticated big mainframes, up 35 or something yeah. Cloud is doing better i was gratified to see it. Good news and the blockchain. We talked about one of their people earlier this week about the blockchain she is trying hard. I like her its daunting. Its hard enough to be microsoft. Yeah. This new facebook, google, amazon world talking about in this uber did you say uber world no. I dont know about ub weuber softbanks investment deal closed yesterday with uber bringing the stake to 15 , including a
Large Purchase
of shares from uber investors and employees. A discount valuation of 48 billion. Completion of the deal triggers governance changes including the addition of new
Board Members
and benchmark capital agreed to drop its lawsuit against
Travis Kalanick
upon the deals complex. Sources say kalanick will get 1 1. 4 billion from the deal and some of the shares into the transaction. The
International Energy
agency said the u. S. Is well positioned to take over saudi arabia and russia as the
Largest Energy
producer by the end of this year. Amazing quite remarkable. I think their call was explosive growth from the
United States
check out crude prices right now. Well show you what the barrel of wti is at, 63. 70. They pointed out because other places are constrained yes venezuela and so did you know what did you know the chicken fried thing . Yeah. Zack brown. Dont you claim oklahoma . Zack brown is awesome a pair of jeans that fit just right and the radios on youve heard of johnny cash, right . Heard of him. All right all right. Countdown to shutdown. The house passed the kick the can bill to fund the government for another month. Now its on to the senate. Im sure youre seeing a lot of
Smiling Faces
. Im reading from the journal,
Senate Democrats
have indicated they have the votes to block the measure to keep the government open so they are saying theyve got the votes to make sure theres a shutdown guess that basically whats going to happen . A lot of
Smiling Faces
down there. That was something we reported yesterday they seem to be buying some time to continue negotiations with leadership, with the president to see if they can get a las lastditch daca deal as part of this its not currently included. Last night the house struck a deal with the conservative
Freedom Caucus
that was also balking at this, to pass that bill that moved into the senates court where there is not on opposition from democrats but also a handful of republicans, at least four, potentially five, and some democrats have said they have enough votes to block the bill paul ryan was pleading with the
Top Senate Democrat
last night to let cooler heads prevail in this situation i also want people to understand that
Senate Democrats
do not oppose anything in this bill theyre just holding this critical funding hostage for a deal on a completely unrelated emigration issue yes, we need to address the daca program, and were engaged in goodfaith negotiations as we speak. But that deadline is weeks away. What followed that moment was tense debate in a procedural vote over in the senate where
Mitch Mcconnell
adjourned the group until 11 00 a. M. Today thats just 13 hours before this shutdown deadline. On the floor senate democrat,
Chuck Schumer
, said there was only one solution to the problem. The four leaders could sit down, theres been a lot of discussion and come to an agreement and do what the president said at one point, send it to his desk and hell sign it. We could get that done before the deadline of tomorrow night expires. Senate majority leader
Mitch Mcconnell
said it is not easy saying its not clear what the president would sign in terms of immigration policy
President Trump
is scheduled to depart for maralago this afternoon with a gala scheduled tomorrow night to mark oneyear of his presidency, but he could be presiding over lastminute deal talks to see what they could hammer out or potent shoolly a looming shutdown one thing democrats have proposed is a shortterm bill that would only last a few days to ramp up the pressure to get this immigration deal as part of this yeah. You know i was kidding you at the top. I knew there was no chance as of yesterday. You know that i know that you know that i know that you were kidding. You are playing it very straight its weird to see. Thats part of my job it is the new yeah. You have to though, i see the press corps. Do they really play it straight those other people youre down there with they have their own i dont know maybe not. I think we can only be responsible for the work product we put out there are good and talented people in the
Washington Press
corps. It says democrats are excited because they have the votes to make sure the government shuts down ill tell you why im pointing it out republicans will get blamed no matter what. Thats just theyre seen as people who dont like government as much as democrats so when it gets shut down, most people immediately assume theyre doing something to try to shrink government its just the philosophy of the two parties. It doesnt matter what the actual facts are of the situation, theyll be tarred with the political damage probably in this case, this is totally unrelated to budget the daca stuff. Totally unrelated to keeping the government open. Its obviously, you know, its being theyre using it, holing it hostage, holding the government hostage to their own interests, right it is in the eye of the beholder or in these situations the eye of the proposer. When democrats were in power and made proposals of this kind, then it was the republicans who were on the other side of the fence trying to get their votes together to block this its worth noting that idealogically there have been a lot of republicans that do not support these shortterm spending bills just on the face of it. They think that military should be funded with more certainty for a longer period of time. They dont like the couples uoif this with the debt ceiling you have republicans in the senate and the house voting against the continuing resolution at that time. Its like the
Obamacare Repeal
you have guys, democrats that dont want it to happen for one reason then the other guy is saying its not far enough. When youre not in power you have the benefit of being more to stick to your position. But when youre in leadership, you have to suck it up and we shouldnt kid ourselves of either party being holier than thow this is the democrats flexing their muscles. We knew from the last continuing resolution, this is the one they were going to do kayla tausche, thank you kayla, thanks for everything seriously. You probably she knew who zack brown was i know you do. Of course they sang the
National Anthem
at the
National Championship
game last monday. They did. Theyre on tour theyre here this summer if they started that game before midnight i might have seen some of that. The outcome wasnt good it was a great game i think georgia has a future i think that well, the coach is from alabama. Thats the irony maybe they finally got some
Good Management
down there. Thank you. Lets get a check on the markets. Joining us is mary ann bartels, head of portfolio strategy at
Merrill Lynch
wealth manment and chris wexler also joins us mary ann, lets start about what the tax plan is going to mean for earnings were in the midst of earnings season waiting to get guidance from these companies what do you anticipate we anticipate earnings going up an additional 10 than where we were without the tax plan we think its a huge benefit for earnings we were already seeing analysts raising numbers, now with the tax plan we expect the numbers to go up more. Is that why weve seen this big jump in the market this year the momentum has been huge just in the first nine or ten trading sessions i think that thats part of it were kind of in the sweet spot of this part of the growth in the economy. And in the world you know, we always talk about the u. S. Were seeing emerging markets recover, seeing japan recover. Seeing europe recover. This is a global recovery. So its very good for the
Multinational Companies
as well. So we think we have another strong year of earnings. You wouldnt call what weve seen so far irrational exuberance absolutely not. How about you, chris. I just got off two days visiting with companies here in new york after meeting with 30 to 40 management teams, theyre positive theyre excited about the future theyre not talking about headwinds, theyre talking about the tailwinds of opportunities to invest money, grow businesses theyre the job creators in the economy. Theyre excited. Technology continues to be a great place where theyre investing money. Data continues to grow data storage, data processing,
Movement Money
is flowing in. Taxes certainly were some part of the discussion. Will it impact them on their rates . Can they return money . These are things theyll think about over a period of time. It wont happen immediately, but its tailwinds and helping the market here. If it doesnt happen immediately you would still be positive on these their these shares yeah, theyre looking at top line growth finally, where they can put leverage into the income statements and have earnings drop to the bottom and tacks are a part of that mary ann, you said capex, we will see companies putting money to work . We see capexa and the return to m a that means what for which sectors . Your space will do well in the small and mid cap chriss sm space will do well we see a lot of potential m a activity in
Energy Consolidation
there, a lot in healthcare, thats something weve been bullish on. Stek our forga tech is our favorite the true leadership in the market is technology we moved into the digital period technology was a big leader for last year. Some people thought that leadership needed to change hands. Heavens no. This is a major cycle. Its a longwinded answer. But in the 1500s the u. S. Economy was driven by agriculture. We had a new
Major Technology
called the steam engine, we went into this industrial period. In 2000 we went into the digital period technology is in early stage of birthing its not just in the
United States
, its global. Your emerging leadership can be industrials. Can i ask something on the m a side talking big m a or smaller theres also a real question around the regulatory environment, what does
America First
mean what does size mean . I think that theres a lot of political pieces to this i think chriss space benefits in the small to mid cap space. It doesnt have to be big headline mergers, but youll get consolidation in the mid to smaller space. Chris, your concern is whats happening with the yield markets. Youre worried about a potential inverted yield curve with the twos and tens. Thats something we keep an eye on its been flattening out i think the fed does have it under control because theyre controlling pretty much all areas of the yield curve for now. The tenyear above 2. 6 now so it hasnt inverted, i dont think it will. The other area to focus on is high yield markets which continue to be healthy for now, but that area could give weakness to small caps we think this will be a good year for small and mid caps, it sets up better for small and mid caps after underperforming in 2017 thank you both for being here thanks. When we come back, a lot going on flying international on united is getting more comfortable, but these things cost money. We have details after the break. You need to buy a car and you want to get an excellent price youd think with all these options it would be easy. But with terms like msrp, invoice, list price, things get confusing pretty fast. You just want to get a real price and thats where true car comes in. Only with true car can you see what other people paid for the car you want and you can connect with certified dealers who offer prices based on this same information. None of those other sites do that. From end to end, true car is your only one stop solution. Welcome back
United Airlines
joining its competitors launching a premium class, it will be called united premium plus passengers will receive free alcoholic beverages. Flts thats a thats all we need on a ninehour flight you also get a blanket from saks fifth avenue. Theres a 27 premium over regular economy seats is what theyre charging you get a slightly better seat so youll be like this and youll still have a pillowment. I got my turtleneck yesterday. The inventor sent me an email yesterday no way. Ill bring it to davos. Well see how it goes yes, you will be in this little seat. You get more leg room. The leg room matters a little more leg room. Im trying to think of an analogy for what premium coach is like. Its like an oxymoron sort of. The way they pack people in. On a ninehour or eighthour flight leg room platters leg room matters. If i can get the exit row, i call that poor mans first class. Always go for the exit row then you cant store anything underneath it doesnt matter you dont fly i flew to chicago i took coach last week. I do all the time because there was no first class. That was an express jet. No, because its a twohour flight was there a front of the plane . Andrew youre sure . He was paying for the ticket himself. I know. Sorkin family was just on vacation, we all sat in the back of course we did
Andrew Ross Sorkin
walks through the front of the plane and people look at you and they try to avoid your gaze as youre moving to row 40 yes absolutely i need this on film absolutely. Do you have any witnesses i have a son named henry. We sat with ipads in the back. You dont want him to know his father cant afford to fly in first class i sat in the middle seat, i gave him the window. This was big news yesterday. Amazon has actually named 20 finalists in its race to win its
Second Headquarters
. The short list includes 19
American Cities
plus toronto the picks lean heavily into the east and into the sunbelt. You figured this would be as far away geographically as you could get from seattle amazon expects to pick the winning city this year you saw newark, new jersey is one of the ones named in this. If they were totally pc about trying to go to an area that could really benefit from this what is your pick . They would go to a place like newark or you could rebuild the entire city with this or do they end up, you know, orlando,
Something Like
that which is nice. You go there because your employees will be happier probably transportation hubs. Transportation. Lets see whats your vote . I want newark i hope they come to newark i think when push comes to shove, theres reasons, stat income tax down there. Theres reasons. Thats why this migration is happening. You can deny its happening, but where youre why do you think detroit was left off the list . I was surprised too i can think of a lot of reasons. Do you want to move to detroit i can think of a lot of reasons why it was left off. Yet places like newark and new york and philadelphia i was surprised they didnt make that list its in the stages of a pretty good recovery they made an interesting i thought their offer was compelling they were also going to do it with canada. Remember they were using the border yes with toronto making the list i have to see this. Panera bread has petitioned the fda to define what an egg is its a shot at competitors im starting to understand this. Do they use a powdered thing powdered eggs panera says burger king, taco bell and dunkin sell egg patties that contain more than five ingredients oh. Okay panera just uses eggs panera wants the fda to issue clear guidance on what brands can actually call an egg thats a fair point that is i wouldnt know there are five
Different Things
in there you have had like an like an egg mcmuffin. Or where its really bad. You know it was a long time ago that that thing came out of the shell. A lot of additives put in powdered stuff doesnt even taste like eggs. Be nice to have a real egg we dont know. This has nothing to do with this is like a chicken or egg thing. Powdered eggs did not come first. Coming up, ibm reporting it has to be the chicken first. They need to sit on the egg. Ibm reporting its
Government Shutdown<\/a> in a bit. Overnight in asia, the nikkei higher. Up 0. 2 . Hang seng up by 0. 4. So was the shanghai in china in europe, at least right now green arrows across the board. Biggest gainer of the major averages is the dax, which is up by almost 0. 9 percent. The tenyear yield hitting 2. 64 yesterday. Thats the highest level since september of 2014. Again, concerns about the
Government Shutdown<\/a> really pushing things well see what happens to the tenyear when and if a budget deal is found. Right now it looks like its setting in at 2. 63 . Some big headlines this morning. Ibm returning to
Revenue Growth<\/a> for the first time in five years. Shares are down. Theres weaker than expected guidance overshadowing that news the company beating on the top and bottom lines but took a charge of 5. 5 billion as a result of the next tax law well talk to an analyst about this at 6 30 a. M. This morning what was your line even trump i was kidding if ginni heard that, she would be mad after working so hard so long to get it to a revenue gain and to attribute it to a macro government you know what tax rate for the quarter was 6 . Which is kind of a common thing with the difficulties. The stock is called down its gone above almost back to where buffett was buying it people soured on it. But its had a good run recently with the entire stock market amazing that the big the sophisticated big mainframes, up 35 or something yeah. Cloud is doing better i was gratified to see it. Good news and the blockchain. We talked about one of their people earlier this week about the blockchain she is trying hard. I like her its daunting. Its hard enough to be microsoft. Yeah. This new facebook, google, amazon world talking about in this uber did you say uber world no. I dont know about ub weuber softbanks investment deal closed yesterday with uber bringing the stake to 15 , including a
Large Purchase<\/a> of shares from uber investors and employees. A discount valuation of 48 billion. Completion of the deal triggers governance changes including the addition of new
Board Members<\/a> and benchmark capital agreed to drop its lawsuit against
Travis Kalanick<\/a> upon the deals complex. Sources say kalanick will get 1 1. 4 billion from the deal and some of the shares into the transaction. The
International Energy<\/a> agency said the u. S. Is well positioned to take over saudi arabia and russia as the
Largest Energy<\/a> producer by the end of this year. Amazing quite remarkable. I think their call was explosive growth from the
United States<\/a> check out crude prices right now. Well show you what the barrel of wti is at, 63. 70. They pointed out because other places are constrained yes venezuela and so did you know what did you know the chicken fried thing . Yeah. Zack brown. Dont you claim oklahoma . Zack brown is awesome a pair of jeans that fit just right and the radios on youve heard of johnny cash, right . Heard of him. All right all right. Countdown to shutdown. The house passed the kick the can bill to fund the government for another month. Now its on to the senate. Im sure youre seeing a lot of
Smiling Faces<\/a>. Im reading from the journal,
Senate Democrats<\/a> have indicated they have the votes to block the measure to keep the government open so they are saying theyve got the votes to make sure theres a shutdown guess that basically whats going to happen . A lot of
Smiling Faces<\/a> down there. That was something we reported yesterday they seem to be buying some time to continue negotiations with leadership, with the president to see if they can get a las lastditch daca deal as part of this its not currently included. Last night the house struck a deal with the conservative
Freedom Caucus<\/a> that was also balking at this, to pass that bill that moved into the senates court where there is not on opposition from democrats but also a handful of republicans, at least four, potentially five, and some democrats have said they have enough votes to block the bill paul ryan was pleading with the
Top Senate Democrat<\/a> last night to let cooler heads prevail in this situation i also want people to understand that
Senate Democrats<\/a> do not oppose anything in this bill theyre just holding this critical funding hostage for a deal on a completely unrelated emigration issue yes, we need to address the daca program, and were engaged in goodfaith negotiations as we speak. But that deadline is weeks away. What followed that moment was tense debate in a procedural vote over in the senate where
Mitch Mcconnell<\/a> adjourned the group until 11 00 a. M. Today thats just 13 hours before this shutdown deadline. On the floor senate democrat,
Chuck Schumer<\/a>, said there was only one solution to the problem. The four leaders could sit down, theres been a lot of discussion and come to an agreement and do what the president said at one point, send it to his desk and hell sign it. We could get that done before the deadline of tomorrow night expires. Senate majority leader
Mitch Mcconnell<\/a> said it is not easy saying its not clear what the president would sign in terms of immigration policy
President Trump<\/a> is scheduled to depart for maralago this afternoon with a gala scheduled tomorrow night to mark oneyear of his presidency, but he could be presiding over lastminute deal talks to see what they could hammer out or potent shoolly a looming shutdown one thing democrats have proposed is a shortterm bill that would only last a few days to ramp up the pressure to get this immigration deal as part of this yeah. You know i was kidding you at the top. I knew there was no chance as of yesterday. You know that i know that you know that i know that you were kidding. You are playing it very straight its weird to see. Thats part of my job it is the new yeah. You have to though, i see the press corps. Do they really play it straight those other people youre down there with they have their own i dont know maybe not. I think we can only be responsible for the work product we put out there are good and talented people in the
Washington Press<\/a> corps. It says democrats are excited because they have the votes to make sure the government shuts down ill tell you why im pointing it out republicans will get blamed no matter what. Thats just theyre seen as people who dont like government as much as democrats so when it gets shut down, most people immediately assume theyre doing something to try to shrink government its just the philosophy of the two parties. It doesnt matter what the actual facts are of the situation, theyll be tarred with the political damage probably in this case, this is totally unrelated to budget the daca stuff. Totally unrelated to keeping the government open. Its obviously, you know, its being theyre using it, holing it hostage, holding the government hostage to their own interests, right it is in the eye of the beholder or in these situations the eye of the proposer. When democrats were in power and made proposals of this kind, then it was the republicans who were on the other side of the fence trying to get their votes together to block this its worth noting that idealogically there have been a lot of republicans that do not support these shortterm spending bills just on the face of it. They think that military should be funded with more certainty for a longer period of time. They dont like the couples uoif this with the debt ceiling you have republicans in the senate and the house voting against the continuing resolution at that time. Its like the
Obamacare Repeal<\/a> you have guys, democrats that dont want it to happen for one reason then the other guy is saying its not far enough. When youre not in power you have the benefit of being more to stick to your position. But when youre in leadership, you have to suck it up and we shouldnt kid ourselves of either party being holier than thow this is the democrats flexing their muscles. We knew from the last continuing resolution, this is the one they were going to do kayla tausche, thank you kayla, thanks for everything seriously. You probably she knew who zack brown was i know you do. Of course they sang the
National Anthem<\/a> at the
National Championship<\/a> game last monday. They did. Theyre on tour theyre here this summer if they started that game before midnight i might have seen some of that. The outcome wasnt good it was a great game i think georgia has a future i think that well, the coach is from alabama. Thats the irony maybe they finally got some
Good Management<\/a> down there. Thank you. Lets get a check on the markets. Joining us is mary ann bartels, head of portfolio strategy at
Merrill Lynch<\/a> wealth manment and chris wexler also joins us mary ann, lets start about what the tax plan is going to mean for earnings were in the midst of earnings season waiting to get guidance from these companies what do you anticipate we anticipate earnings going up an additional 10 than where we were without the tax plan we think its a huge benefit for earnings we were already seeing analysts raising numbers, now with the tax plan we expect the numbers to go up more. Is that why weve seen this big jump in the market this year the momentum has been huge just in the first nine or ten trading sessions i think that thats part of it were kind of in the sweet spot of this part of the growth in the economy. And in the world you know, we always talk about the u. S. Were seeing emerging markets recover, seeing japan recover. Seeing europe recover. This is a global recovery. So its very good for the
Multinational Companies<\/a> as well. So we think we have another strong year of earnings. You wouldnt call what weve seen so far irrational exuberance absolutely not. How about you, chris. I just got off two days visiting with companies here in new york after meeting with 30 to 40 management teams, theyre positive theyre excited about the future theyre not talking about headwinds, theyre talking about the tailwinds of opportunities to invest money, grow businesses theyre the job creators in the economy. Theyre excited. Technology continues to be a great place where theyre investing money. Data continues to grow data storage, data processing,
Movement Money<\/a> is flowing in. Taxes certainly were some part of the discussion. Will it impact them on their rates . Can they return money . These are things theyll think about over a period of time. It wont happen immediately, but its tailwinds and helping the market here. If it doesnt happen immediately you would still be positive on these their these shares yeah, theyre looking at top line growth finally, where they can put leverage into the income statements and have earnings drop to the bottom and tacks are a part of that mary ann, you said capex, we will see companies putting money to work . We see capexa and the return to m a that means what for which sectors . Your space will do well in the small and mid cap chriss sm space will do well we see a lot of potential m a activity in
Energy Consolidation<\/a> there, a lot in healthcare, thats something weve been bullish on. Stek our forga tech is our favorite the true leadership in the market is technology we moved into the digital period technology was a big leader for last year. Some people thought that leadership needed to change hands. Heavens no. This is a major cycle. Its a longwinded answer. But in the 1500s the u. S. Economy was driven by agriculture. We had a new
Major Technology<\/a> called the steam engine, we went into this industrial period. In 2000 we went into the digital period technology is in early stage of birthing its not just in the
United States<\/a>, its global. Your emerging leadership can be industrials. Can i ask something on the m a side talking big m a or smaller theres also a real question around the regulatory environment, what does
America First<\/a> mean what does size mean . I think that theres a lot of political pieces to this i think chriss space benefits in the small to mid cap space. It doesnt have to be big headline mergers, but youll get consolidation in the mid to smaller space. Chris, your concern is whats happening with the yield markets. Youre worried about a potential inverted yield curve with the twos and tens. Thats something we keep an eye on its been flattening out i think the fed does have it under control because theyre controlling pretty much all areas of the yield curve for now. The tenyear above 2. 6 now so it hasnt inverted, i dont think it will. The other area to focus on is high yield markets which continue to be healthy for now, but that area could give weakness to small caps we think this will be a good year for small and mid caps, it sets up better for small and mid caps after underperforming in 2017 thank you both for being here thanks. When we come back, a lot going on flying international on united is getting more comfortable, but these things cost money. We have details after the break. You need to buy a car and you want to get an excellent price youd think with all these options it would be easy. But with terms like msrp, invoice, list price, things get confusing pretty fast. You just want to get a real price and thats where true car comes in. Only with true car can you see what other people paid for the car you want and you can connect with certified dealers who offer prices based on this same information. None of those other sites do that. From end to end, true car is your only one stop solution. Welcome back
United Airlines<\/a> joining its competitors launching a premium class, it will be called united premium plus passengers will receive free alcoholic beverages. Flts thats a thats all we need on a ninehour flight you also get a blanket from saks fifth avenue. Theres a 27 premium over regular economy seats is what theyre charging you get a slightly better seat so youll be like this and youll still have a pillowment. I got my turtleneck yesterday. The inventor sent me an email yesterday no way. Ill bring it to davos. Well see how it goes yes, you will be in this little seat. You get more leg room. The leg room matters a little more leg room. Im trying to think of an analogy for what premium coach is like. Its like an oxymoron sort of. The way they pack people in. On a ninehour or eighthour flight leg room platters leg room matters. If i can get the exit row, i call that poor mans first class. Always go for the exit row then you cant store anything underneath it doesnt matter you dont fly i flew to chicago i took coach last week. I do all the time because there was no first class. That was an express jet. No, because its a twohour flight was there a front of the plane . Andrew youre sure . He was paying for the ticket himself. I know. Sorkin family was just on vacation, we all sat in the back of course we did
Andrew Ross Sorkin<\/a> walks through the front of the plane and people look at you and they try to avoid your gaze as youre moving to row 40 yes absolutely i need this on film absolutely. Do you have any witnesses i have a son named henry. We sat with ipads in the back. You dont want him to know his father cant afford to fly in first class i sat in the middle seat, i gave him the window. This was big news yesterday. Amazon has actually named 20 finalists in its race to win its
Second Headquarters<\/a>. The short list includes 19
American Cities<\/a> plus toronto the picks lean heavily into the east and into the sunbelt. You figured this would be as far away geographically as you could get from seattle amazon expects to pick the winning city this year you saw newark, new jersey is one of the ones named in this. If they were totally pc about trying to go to an area that could really benefit from this what is your pick . They would go to a place like newark or you could rebuild the entire city with this or do they end up, you know, orlando,
Something Like<\/a> that which is nice. You go there because your employees will be happier probably transportation hubs. Transportation. Lets see whats your vote . I want newark i hope they come to newark i think when push comes to shove, theres reasons, stat income tax down there. Theres reasons. Thats why this migration is happening. You can deny its happening, but where youre why do you think detroit was left off the list . I was surprised too i can think of a lot of reasons. Do you want to move to detroit i can think of a lot of reasons why it was left off. Yet places like newark and new york and philadelphia i was surprised they didnt make that list its in the stages of a pretty good recovery they made an interesting i thought their offer was compelling they were also going to do it with canada. Remember they were using the border yes with toronto making the list i have to see this. Panera bread has petitioned the fda to define what an egg is its a shot at competitors im starting to understand this. Do they use a powdered thing powdered eggs panera says burger king, taco bell and dunkin sell egg patties that contain more than five ingredients oh. Okay panera just uses eggs panera wants the fda to issue clear guidance on what brands can actually call an egg thats a fair point that is i wouldnt know there are five
Different Things<\/a> in there you have had like an like an egg mcmuffin. Or where its really bad. You know it was a long time ago that that thing came out of the shell. A lot of additives put in powdered stuff doesnt even taste like eggs. Be nice to have a real egg we dont know. This has nothing to do with this is like a chicken or egg thing. Powdered eggs did not come first. Coming up, ibm reporting it has to be the chicken first. They need to sit on the egg. Ibm reporting its
First Quarter<\/a> of
Revenue Growth<\/a> in the last 23 quarters, however tax related charges weighed on earnings and the stock is lower even after the investors finally got what they were waiting 23 quarters for well talk to an analyst next. Heres a look at yesterdays s p 500 winners and losers whats
Critical Thinking<\/a> 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 with expedia, you can book a flight, then add a hotel, and save. Everything you need to go. Expedia hey, need fast try cool mint zantac. It releases a cooling sensation in your mouth and throat. Zantac works in as little as 30 minutes. Nexium can take 24 hours. Try cool mint zantac. No pill relieves heartburn faster. Hey, what are you guys doing here . Weve been helping you prepare and invest for retirement since day one. Why would we leave now . Because im retired now. So . Were voya. We stay with you to and through retirement. With solutions to help provide income throughout. So, youll still be here to help me make smart choices . Well, with your finances that is. We had nothing to do with that, uh, tie. Or the suit. Or the shirt. Voya. Helping you to and through retirement. Welcome back youre watching squawk box live from the
Nasdaq Market<\/a> site in times square. O a shutdown the markets are taking it in stride the dow looks like it would open up higher again, 25 points higher nasdaq looking to open higher as well the s p 500 looking to open about 5 points higher. The
Trump Administration<\/a> considering
San Francisco<\/a> fed president
John Williams<\/a> as vice chair of the
Federal Reserve<\/a> thats why we were playing that music. It wasnt clear if williams thank you you opened the floodgates. We will be playing it every day. It wasnt clear if pill ywils was the frontrunner other candidates include three frequent squawk box gets
Larry Lindsay<\/a> among them and mo h mo hhammed elerian. Because of the multi speed economies. We love all of them cant pick a child. Williams said he would welcome the opportunity to contribute at the highest levels lets tem yll you about sto to watch this morning. American express reporting its
First Quarter<\/a>ly loss in 26 years in the
Fourth Quarter<\/a> but adjusted earnings did beat the street they will suspend the
Share Buyback<\/a> program for six months to rebuild capital following tax law changes in the u. S thats why they reported that loss stock is down by 2 . Thats a sane move to say, y well rebuild capital, and go. With the old system we had much higher nominal rates, and they were doing things that allowed them to benefit from all the loopholes, now it doesnt surprise me at all. I know. Now were seeing it. The tide has come down i have to say, i like to see a longterm move like this even though the stock reaction is down 2 i like to see a longterm move where they are concerned about making sure but youre seeing nearterm they were doing it one way now when you level the
Playing Field<\/a> its not gaming the system, its playing by the rules of the system im the one who usually says that all of us do this, personally in our own lives people say thats your duty to avoid as much as you can. Not evade, but avoid play by the rules, but when the rules are so complicated i never knew about our friend here, how affective he was, when something changes, you have to gauge the situation to figure out what to do did you see him jump into action didnt you you did. You found out about state taxes as you said, it was your patriotic duty i never knew he was that patriotic. I never new the level of your patriotism in terms of avoiding
God Bless America<\/a> lets tell you about jpmorgan jpmorgans
Ceo Jamie Dimon<\/a> receiving 29 29. 5 million in tol pay last year according to an s. E. C. Filing. Thats up more than 5 from 2016 his pay package includes 5 million in cash. His base salary remains unchanged at 1. 5 million
Texas Instruments<\/a> named
Brian Crutcher<\/a> as the new ceo. He will succeed
Rich Templeton<\/a> in june. Templeton will stay on as chairman did you realize its been 14 years that templeton has been there . He was put in there at 2004. I remember the young new guy coming in. I do. Crutcher has worked at the company for more than two decades. But my failing faculties prevent me from remembering the guy we were i see his face. Yeah. I liked him its not your failing faculties because youre old, i cant remember this either who was the guy before templeton . He was our buddy this is why google exists so you dont have to remember everything of course lets get to ibm posting
Fourth Quarter<\/a> beats on the top and bottom line ending a 22 quarter streak of year over year revenue declines speaking on mad money last night, ibms former cfo and current
Global Markets<\/a> chief talked about the companys momentum first half to second half which we described in july played out as we said. That puts us on a good base. We guided towards growing revenue and stable margins when we think about the transformation of ibm, yes, now that the portfolio is transformed, we have momentum going after 2018 joining us now is
Steven Milanovich<\/a> from ubs. Great to have you today. Especially after this happened it was a big day why is the stock down first of all after that great news on revenue finally growing. The stocks had a good run early this year. It underperformed the market by 27 last year. Theres a bit of a dogs to the dow feeling. In terms of the report, revenue is g margood, but margins were pressure they had a 6 tax rate the guidance for 18 is the same as the guidance for last year. Its 1380 in earnings. I thought they might have guided above 14. Monetary pressure is the reason the stock is down here people are excited about stability at the company, revenue growing, but not convinced that theyre out of the woods. So, with ibm at this point, we have seen it run up recently. Maybe its not surprising to see it drop down a bit how much of the revenue gain was currency 3 points, wasnt it . If the dollar had not moved at all, would they still have been down they had headwinds with currencies in the past you live by the sword, die by the sword, but it helped, right . They would have had slight
Constant Currency<\/a>
Revenue Growth<\/a> theyre suggesting for 2018 theyll have reported growth with help from currency two to three points as well as actual growth so the street tries to look through currency the noncurrency revenue is growing. So thats encouraging. They do have a mainframe cycle thats contributing to it. At the end of the day, we are focused on margins they have their new business they claim the new business will be more profitability than the legacy business. Youre talking about blockchain and watson and all of those . Exactly artificial intelligence, consulting that goes with that recently blockchain. New types of services and software the cloud. Remember, their strategy is the two pillar cloud platform, cognitive commuting. Thats where theyre investing into ginni romettys credit, three, four years ago she said we have to invest into these new businesses, so theres progress, but were not yet convinced the margins are where they need to be could she be investing more in those business . Do you look and say there should have been a bigger bet into those businesses you could argue there should have been an earlier bet is there still a bigger bet to be made possibly. By the way, they were early on blockchain relative to others they absolutely are block klachain is nascent and na profit driver for many years but it could be a huge profit driver later its important. They do have thought leadership working with a lot of big banks. Free cash flow is good, but they give most of it back to investors. Last year the m a was quite small. A tenth of the
Previous Year<\/a> so theres an argument that perhaps they should be more aggressive on m a and highgrowth areas. We will see her next week in davos. Whats one question will you have for you why do you believe the margins of the new business will be better than the very good legacy margins you have enjoyed historically so, the cloud business, that was up 30 are they now real players . A company can have thought leadership thats weird yeah. Thats a good buzz term for yo you. You know, if i can pull that out of my pocket ibm has always succeeded when its been a thought leader in the industry in cloud, theyre doing a better job, but i would argue there, amazon, google and microsoft are probably the thought leaders so ibm is on the defensive why do they have a 6 tax rate they still have about 4 billion of tax credits going forward. Putting aside the 5 billion charge related to the tax law legislation. Whats that related to . Discrete items that they have legitimately they have things theyre working through with the irs, they do tend to go into ibms favor, because in the past ibm has been conservative, but they tend to pull out a low tax rate when they need it they need it in the
Fourth Quarter<\/a>, they need it in the
First Quarter<\/a>, too. I need one. Please. Can i pull it out have you checked into that, andrew how do you pull out a low tax rate i could definitely please dont. I dont think you have 4 billion do you have any n. O. L. S nothing im just patriotic like you are. Were finally were finally doing what you wanted to us do for so long. Very quickly, what do you tell people to do if youre not completely convinced the margins are there . Buy the stock . Hold the stock hold the stock. We have a nueutral on it here. Dont chase it here. Its mark shepherd. I thought it was its mark shepherd. He was there until 2009. Mark shepherd was chairman and ceo of
Texas Instruments<\/a> i dont remember him. Maybe he was before yeah. He was from to 2004 i think he lived okay. When we come back, the countdown to the shutdown. Hakeem jeffries will join us at 8 00 a. M. Eastern time at 8 40 we will talk to rob portman. Stay tuned youre watching squawk box on cnbc what are the ingredients of a life well lived . Is it the places you go . The things you own . Or the people that fill it with meaning . For 150 years, generations of families have chosen pacific life for retirement and
Life Insurance<\/a> solutions. Protecting whats most important to you. Thats the power of pacific. Ask a
Financial Advisor<\/a> about pacific life. Well despite the chill we are weeks away from the start of the spring housing market. All anyone in the industry can talk about is record low supply of homes for sale. Now
Mortgage Rates<\/a> are breaking into new highs and that will make supply worse. Diana olick will tell us why
Mortgage Rates<\/a> were stuck near record lows for the bulk of last year. Thats no longer the case. Were suddenly breaking out. The average rate on the 30year fixed is up nearly a quarter point from the beginning of this year from 4 to 4. 22 a big jump to end yesterday thanks to the selloff in the bond market rates loosely follow the yield on the tenyear treasury that might not seem like a lot, but theres a couple reasons why the move could weigh on the spring housing market. Namely because of the supply crisis theres so much demand, so little supply already that home prices are rising far too fast faster than incomes and inflation. If rates continue to rise, sellers will have less incentive to list their homes for sale because theyll lose that rock bottom rate they have locked in now. That means even fewer homes for sale on the buyers side, a new rising rate environment could have more firsttime rate buyers to get in fast before rates rise further and price them out that means more demand. Whats ahead in the shortterm, a
Government Shutdown<\/a> could reverse the bochnd selloff or bd buyers may feel like its time to get back in again after this kind of spike. Just one note for today, if the government does shut down, government mortgage programs like fha and va loans, they are all shut down as well. Diana, thank you very much. Coming up, from prison to politics,
Don Blankenship<\/a> served time for mine safety violations, but now hes running for sflena in
West Virginia<\/a> he will join us next as we head to break a quick check of the european markets right now. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping
First Responders<\/a> connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Tomorrow, its a day filled with promise and new beginnings, challenges and opportunities. At ameriprise financial, we cant predict what tomorrow will bring. But our comprehensive approach to
Financial Planning<\/a> can help make sure youre prepared for whats expected and even whats not. And that kind of
Financial Confidence<\/a> can help you sleep better at night. With the right
Financial Advisor<\/a>, life can be brilliant. Our next guest is going from prison to politics he spent a year behind bars. Hes now running for u. S. Senate he joins us on the news line
Don Blankenship<\/a>, former chair and c of massey energy. Good morning. Good morning. Tell us how you expect to run and how you can overcome some of the publicity and obviously some of the past . Well, i think on the explosion and the prosecution, if you will, its probably a badge of honor to have been in
West Virginia<\/a>, at least, to have been jailed by obama and
Loretta Lynch<\/a> because i think most people are coming to realize there are a lot of problems in the doj and of course the candidates that im running against, two of them supported hillary in the past, she didnt do too well in
West Virginia<\/a> and the third one is from new jersey new york. I think weve got a pretty good chance. In terms of your particular platform, is it its closer to
President Trump<\/a> than anyone probably for certain in
West Virginia<\/a>, if not across the entire country. In fact, three or four years before
President Trump<\/a> ran for office i produced a documentary called rape session with is a play on the words of regulation and recession that speak to the words of what
President Trump<\/a> was talking about, trade policy, illegal immigration, corruption, taxes, so forth. This is senator joe manchin on twitter he says, i hope that mr. Blankenship chooses to do the right thing and disappear from public from the public eye. What do you make of that doesnt sound very moderate or centrist to me. The senator declared me guilty before i ever went to trial and so didnt president obama effectively and of course i was tried in front of obama appointed judges and i think people see through what happened there. And, of course, the investigation reports, they show the government issues were under obamas control, mansions control and false. I think it will play well for me as the campaign develops. And do you think or would you try to score an endorsement from
President Trump<\/a> . Not during the primary, i wouldnt expect that he would endorse anyone during the primary, but i think he probably will endorse anyone against senator joe manchin in the general. In the primary it will be primarily evan jenkins and patrick morsi and myself like i said, jenkins has been in
Public Office<\/a> for 20 years and not done anything for
West Virginia<\/a> mr. Morici is from out of state. I think ill stack up pretty well against them. Do you think given the history and the conviction, and i appreciate the point that there are people who believe that you were wrongly convicted, but nonetheless, that it would and given the deaths that did take place, the very real deaths that did take place and the very real victims, that it would be hard for certain people to endorse you . Im sure it will be hard if they continue to believe that, but the fact of the matter is that anybody that cares to look knows it was not what the government said it was obama declared that he knew what it was before they even investigated it and so didnt others it was not a dust explosion, it was a gas explosion and the science will show that of course, i will continue to file motions and paperwork, if you will, to try to get the verdict invalidated and that will be hard to do that before the primary, but the bottom line is that
West Virginia<\/a>ns will learn through our campaign that the explosion did not occur the way the government said it did and theyll also learn about the real
Don Blankenship<\/a> and just so we understand, i mean, youre going to be running on the track record as an executive, as a , where do you where do you land on social issues relative to economic ones, for example . I think im pretty much in line with the
Republican Party<\/a> on things like abortion and other issues of that nature, which most
West Virginia<\/a>ns are so i think i line up really well with the typical republican platform and perfectly well with
President Trump<\/a>. And i think i have more going for me than having been the ceo of a coal company. Ive been involved in
West Virginia<\/a> politics for a long time i ive written campaigns that defeated mansion and got the severance tax or the tax, i should say, the sales tax on groceries eliminated and ive also been heavily involved in donations and so forth so the people that know me see me as much more than a ceo of a coal company. Would you have supported the tax reform plan . Yes and how would it simple answer after whats that and how would you think about the debt that may that may come, the 1. 5 trillion in debt that the package may be worth . Well, i think the people are greatly underestimating the growth i mean, we said 7 to 12 of growth and 3 was an achievement. The fact is if you change both the regulations and the attitude, if you will, and the tax policy, you could easily get 4, 5, 6 growth and it will more than overcome the deficit that would otherwise occur. Don, we appreciate you checking in with us. We look forward to talking to you throughout this process. Thank you very much thank you. I appreciate you having me on. You bet. When we come back, shutdown looming. We will get a live report from washington on todays budget vote in the senate that would keep the government running. Later, senator rob portman will tell us how hes voting squawk box will be right back. whispering excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Shutdown showdown. The house passes a temporary bill ibm shares under pressure. Well show you whats dragging big blue into the red. The
Chocolate Factory<\/a> for marijuana buzzing. The second hour of squawk box begins right now live from the beating heart of business, new york city this is squawk box. Good morning nice shot of new york city right there. Welcome back to squawk box right here on cnbc live from the
Nasdaq Market<\/a> area take a look at the futures on this friday morning. We do have some green arrows despite what we keep calling the countdown to the shutdown. Thats what may or may not be happening in washington right now. Dow looks like it would open about 26 points higher the nasdaq 21 points higher. S p 25 points higher ibm shares, they are lower this despite breaking what has been a string of revenue declines 22 quarters of revenue declines. This time they break the streak and yet the stock is down this morning 3. 3 of premarket. The
Company Reported<\/a> better than expected earnings. Posted a revenue increase for the first time, as i said, now thats in 23 quarters. A cautious forecast among some of the factors pressuring the stock this morning well keep an eye on that. Similar story for
American Express<\/a> which beat on the top and bottom lines but is trading lower. Amex took a onetime charge to cover repatriation taxes and suspended stock buy backs for the first half of this year. This, i believe, was probably the last is this the last quarter . Perhaps. But its good to see an outgoing ceo take some difficult moves to help position the company. Absolutely. 100 goes out, as you can say, off of that. Adt going public today after seeing its ipo priced well below the expected range the
Home Security<\/a> company will go public at 14 per share compared to an expected range of 17 to 19. Investors have expressed concern over adts ability to get customers. Does everybody remember where adt once was yeah, tyco. Lawmakers have just under 17 hours to pass a spending bill. Kayla tausche joins us right now. She has more on what to expect and how things are jockeying into positioning at the last minute kayla, good morning again. Good morning, becky 17 hours until that deadline but 4 1 2 hours until the senate convenes again majority leader
Mitch Mcconnell<\/a> adjourning late last night after tense debate with the vote still in jeopardy. At least four republicans plan to vote against it
Chuck Schumer<\/a>, whom aides say has enough to thwart the bill. It offers citizenship to children of undocumented immigrants second, after a 30 day funding bill to a couple of days and take out the sweeteners. That would add pressure to get to the deal. One problem, funding for
Childrens Health<\/a> insurance which is included in this bill expires today. On immigration, mcconnell said the deal brokered by hill leaders wouldnt necessarily get the president s support. The presidency under our constitutional system is not irrelevant hes the person who signs things into law for most ofus, in the house an senate, on the republican side, were interested in what his views are and those have not been made fully apparent yet the white house does support the bill that the house passed last night speaker ryan striking an 11th hour deal with the house
Freedom Caucus<\/a> for its few dozen votes, but this could be a ping pong situation, becky, back and forth where each chamber is considering new details if, in fact, that is the route they choose to take. Were talking about hours for this, really, is what it kind of breaks down to i know its difficult to try to figure it out. People in washington, are they thinking odds are it will be a decision odds are or odds or that, look, its going to be too much of a heavy lift in that short amount of time . Well, the gamble that
Senate Majority<\/a> leader
Mitch Mcconnell<\/a> is making is that the later you have the senate come into session this morning, the closer you potentially get to a shutdown, meaning those handful of republican nos would feel too much pressure to actually vote no and they might become yeses theyre also just less than a dozen democrats whose votes are unclear. They voted in favor of the last shortterm spending bill back in december and have been mum on where they stand this time around the whip count is actually a little bit fuzzy here. Yesterday
Senate Democratic<\/a> aides said they have the votes to thwart the deal theyre thinking the closer you get the more pressure people will feel and the more they wont want to see this end up in a shutdown. Kayla, thank you very much. Folks, at 8 00 a. M. Eastern time
Hakeem Jeffries<\/a> will be joining us to talk about last nights note at 8 30 a. M. Senator rob portman will be our special guest. Well talk to him about how he plans to vote. Stick around for both of those interviews. Concerns over a
Government Shutdown<\/a> hitting the markets a little yesterday dow closing down 97 points this morning the dow looks like its going to open a little higher joining us now,
Gabriella Santos<\/a> and doug ramsey from the lewdhold group jim paulson is at the lewdhold group. Whats his title there hes chief investment strategist and im chief
Investment Officer<\/a> we sit on the same
Asset Allocation<\/a> committee. Whose decision was it back in march of last year to say that trumps going to regret taking credit for the stock market . I think it was you according to doug ramsey. That was me. It said that because hes entering the stock market is at one of the most richly valued stock markets in u. S. History when he was elected. Its gone up 40 since then. Was it really richly valued when he was elected or are you revisiting that notion tech stocks might be up 40 i think the markets maybe up 15 i mean, the view that view was totally nonpartisan. I mean, the study was done looking from the valuations as of
Inauguration Day<\/a> a year ago looking at the likely fouryear returns. So ive got three more years for that to prove out. Its early. Okay all right. Much like w coming in where theres hope theres maybe it will turn down and back down you might still be right about that but at this point youre basically saying that you dont have any worries about a shutdown though . No. I think its theatrics you know, the democrats and republicans position themselves as if theyre miles apart, but really i think both parties when you look at the ultimate policies and the spending that both embrace, theyre playing between the 40 yard line so, i mean, the potential for any kind of shutdown here does not impact our market view in the least. Gabriella, youve been which is bullish, by the way. Good. Youve been talking about domestic investors missing the boat to some extent because of you like the
Global Markets<\/a> more thats been your mantra for a while. It has been about 18 months, two years. Done pretty well here we have absolutely, and its not at all a knock on the u. S. Economy, on the u. S. Market either, but just one thing to keep in mind for last year, really phenomenal year for u. S. Equities, 22 . Everyone else up 28 so, yes, the u. S. Is doing phenomenally, but international is coming back and its outperforming. We think thats a trend that continues for the next few years. It shows having a little bit of balance in making sure you have exposure both to domestic and international story. So at any time though you point out that im trying to figure out something thats consensus here whats the most you say we can have a correction at any time, could be 5 , could be 10 , could be a buying opportunity. Whats the most nonconsensusening your viewpoint right now that investors could benefit from what do you think . The first is international outperformance, again, focusing on strong performance, even better abroad. And the second is in regards to rates. I think weve just started seeing a move higher on yield, right . Were still at 2. 6 yes, weve moved up but thats still incredibly low for an economy in the ninth year of the expansion, accelerating to probably 3 this year and with
Central Banks<\/a> around the world normalizing policy we see rates ending the year close to 3 . Doug yeah, i know what i like here that i wanted to ask you about, and that is that some of the recent volatility in the stock market you think has to do with bitcoin finally came down from what almost 20,000 and so you think that can actually spill over into the speculation that maybe is in the stock market or not . Yeah, i do. I mean, to the extent that its, you know, social mood that drives these things. When you have something that, i mean, has very ephemeral fundamentals that cracks 50 , i think thats a sign that investors or in this case are no longer able to suspend their belief i think its important to watch. You even mention the super bowl tickets, how expensive those were, and you have front row seat to that, dont you . Youre right in minneapolis. Yeah, in my living room do you like the vikings this time around . Im a i do i do defense wins championships gabriela, are you a vikings fan . Im from brazil no comment world cup is coming. Do either of you think that were underestimating inflation . Yes yes. You do . Absolutely. Thats exactly why we have a slightly out of consensus view on rates inflation has already started to turn around for the past three months after, yes, some very disappointing months there around the second,
Third Quarter<\/a> of last year core inflation is turning back to 2 . Its not at all saying that well get much above that, but its enough to keep the fed on track in terms of rates and in terms of the
Balance Sheet<\/a> absolutely pretty interesting. Doug, where is steven . When he retired 2011 im sure he still weighs in, doesnt he . He does he came to our christmas party, got a new girlfriend. Good for him. Still got that beard you have a beard and paulson has a beard. Is that like a leuthold thing or is that just its freezing in minneapolis . Thats exactly it. Is that it . Its cold out here. Its a seasonal thing. How cold is it . Thins out during the summer. Becky, how cold is it so cold they had to chip the dog off the fire hydrant okay. Wow what . Its so cold that pick pockets what was it well, you want me to repeat the won that you wont repeat. You know exactly what it is . No, no, no, because its about pick pockets, pick pockets have their hands in their own pockets. It was supposed to be lawyers. Lawyers yeah, lawyers. All right. But we digressed doug, thank you. Thank you. Im definitely going to use that. Chipping the dog off the fire hydrant . That was a scary visual. Hes attached. Ahhh. Okay. Coming up, when we return,
Julia Boorstin<\/a> taking a look at
President Trump<\/a>s media regulatory overhaul despite his objection to the at t time warner deal, more than 70 billion worth of deals have been done in the space. We will talk about what that means in just a moment later, president s infrastructure plan taking place. Secretary ray lahood and ed rendell are going to debate the state of the nations airports, roads, bringesmodg, re stay tuned youre watching squawk box here on cnbc only track a benchmark. Flexshares etfs are built around the
Way Investors<\/a> think. With objectives like building capital for the future, managing
Portfolio Risk<\/a> and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the
Funds Investment<\/a> objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Welcome back to squawk box. It has been one year since trump took over. What has it meant ft. Meade yeah
Julia Boorstin<\/a> joins us this morning with more. Good morning, andrew. One year into his presidency trump has followed through on some of his campaign trail promises and threats to the
Media Industry<\/a> last month the
Trump Administration<\/a>s fcc voted to overturn
Net Neutrality<\/a>. The obama administrations regulation of the internet this is after trump promised to, quote, eliminate the most intrusive regulations. Obamas attack on the internet is another top down power grab
Net Neutrality<\/a> is the fairness doctrine he says will target conservative media. While taking a light regulatory touch on
Net Neutrality<\/a>,
President Trump<\/a> has taken an active stance on mergers after trump criticized one of the largest media deals ever, at ts 85 billion deal of time warner, the department of justice sued to block the deal. Heres what trump said back on the campaign trail at t is buying time warner and, thus, cnn, a deal we will not approve in my administration because its too much concentration of power in the hands of too few
President Trump<\/a>s opposition to at t and time warners merger hasnt stopped a number of other media mergers. Last year four were announced across the media landscape, disney buying foxs assets discovery buying scripts and meredith buying time the disney fox combination is the largest of all of those deals valued at 52. 5 billion of stocks that deal sparked no controversy. The president said he thinks that deal is good for jobs andrew im just media mergers given this situation or not . Well, yes i think that the consensus now is that theres so much pressure on companies to merge because with this consolidation, some of the smaller guys are just going to be put in a very tough situation when it comes to negotiating for distribution and reaching consumers so i think theres a lot of talk now about whats going to happen with viacom and cbs. Whats going to happen to some of these smaller players like lions gate who are considered for thats along the smaller end. The reason i ask is when you think about lions gate, people say wheres amazon wheres apple . Wheres google well, amazon my larger question is if one of those players becomes the buyer of any of these other companies are we back in the same conversation that were having right now about time warner at t . Well, look, i think if amazon or apple were to buy a company like lions gate for a company of the size and scale of amazon and apple, a lions gate acquisition would not be massive for them it would be a way to grow their
Media Industry<\/a>, but i think if youre asking about the question of competition and concerns about antitrust, the industries are all converging right now youre seeing the tech industry, the
Media Industry<\/a> all compete with each other in ways that they havent before which is why you have at t, you know, defending its choice and its decision to buy time warner, because they simply believe that that kind of vertical merger historically hasnt been blocked and that theres so much competition out there that everyone from facebook to google to the traditional
Media Players<\/a> like disney is all competing for consumers attention so they say that it should be allowed. I thought andrew was going to ask you about whether you would would you stay in old california or would you move to
New California<\/a>, julia . I think you have lower taxes in
New California<\/a> but you wont be on you might not be as close to the water have you thought about that . Is that going to happen . You know, its not something that seems plausible enough that ive had to consider a move or not. All right all right. Just wondering because they dont want to leave the
United States<\/a> apparently, they just want to they want to leave california. Okay all right. Thanks, julia. Probably wont happen. Youre probably fine get back to the mergers. Coming up, amazons short list of cities do they have one in
New California<\/a> i dont know. I dont think so list of cities for its
Second Headquarters<\/a> a look at whos in the running is right after the break
Infrastructure Spending<\/a> front and center what will the president s plan entail well discuss that at 7 30 eastern. Squawk box will be right back. Time now for todays aflac trivia question. What was netflixs first igal series . The answer when cnbc squawk box continues and a gentle wavelike motion. Liberate your spine. Aflac and reach, toes blossoming. Not that great at yoga ya but when i slipped a disc, he paid my claim in just one day. So he had your back . Yup in just one day, we process, approve and pay. One day pay. Only from aflac now the answer to todays aflac trivia question. What was netflixs first original series . The answer, house of cards. Welcome back to squawk box this morning amazon has named 20 finalists in its race to win its
Second Headquarters<\/a> the short list includes 19 cities plus toronto. Hold on yeah. Hold on. The picks lean heavily east and in the sunbelt amazon expects to pick the winning city this year lots of chatter, by the way, about one city thats not on the list, detroit. We talked about that earlier but you can look through the list right there and i know theres some people at this table rooting for newark at this point. Or philadelphia or philadelphia. I love to see that. New york city would be interesting. Did you see, i hadnt put two and two together they have washington, washington d. C. , maryland,
Southern Maryland<\/a> and
Northern Virginia<\/a> which is kind of like theyve got three different locations in d. C. Its possible you might consider colleges and talent. Right. Coming from an area. Right. Raleigh durham . Pittsburgh, too carnegie mellon. Columbus . Ohio. That would be great columbus, i like my id feel like i need to recuse myself. As a homer . Yeah, as a homer, but i dont know i like warm weather. But its supposedly going to get warmer. Of all of the cities they think they could help the most. In terms of help instead of whats good for them, whats good for the city . What would be good for the country . Is there one that you think you know what, its like you need to do the ben franklin clothes. No, you need to do the positives and the negatives because its nuanced, right yeah. Not straightforward theres a lot of jesus, you asked, you know, they need to go to, i dont know, the worst place in the country they need to go there. Something social if you want a virtue signal like larry. Youre going to see plenty of these thats preposterous. All 20 of these cities jockeying to come up with their best proposals i think philadelphia has a billion dollars in incentives theyre planning to put together philly would be good. Theyre going to get the cities to put the very best offer on the table. Philly would be good with the best
College Education<\/a> in the world at the university of pennsylvania when we come back, the president s infrastructure plan is taking shape. We will talk spending and where the money will come from to fund
Major Projects<\/a> around the country right after this break. Right now though as we head to that break, take a look at the u. S. Equity futures. A big week a lot of swings during the trading day, too yesterday was a down day 97 points or so. Devery big week for the up sis. Right now green arrows acro the board. Dow up 32. Squawk box will be right back. Another day of work. Why do you do it . Its not just a pay check, you actually like what you do. Even love it. And today, you can do things you never could before. Youre developing ai applications on the cloud. Finding insights hidden in decades of medical documents. And securing millions of iot sensors. So get back to it. And do the best work of your life. And do the best work of your life. But through goodt times and bad at t. Rowe price weve helped our investors stay confident for over 80 years. Call us or your advisor. T. Rowe price. Invest with confidence. Good morning welcome back to squawk box here on cnbc were live at the
Nasdaq Market<\/a> center in times square accord yeah therapeutics is on the rise this morning. Its been boosted by both reports that it is possible that it could become a takeover target of
Biotech Company<\/a> biogen as well as the announcement of a
Corporate Restructuring<\/a> thats designed to reduce expenses. Youre looking at that stock up about 9 right now the white house also reportedly considering
San Francisco<\/a> fed president
John Williams<\/a>, cue the music this morning, to be fed vice chairman. Thats according to the wall street journal i said cue the music. We can sing for you. Take your pick. Bingo star wars. Hes set to replace janet yellen as fed chair. Also on the list we should tell you a couple other regular squawk box guests including muhammad al arian. Cocacola is going to make the packaging 100 recyclable by 2030 james quincy says the world has a packaging problem and
Companies Like<\/a> him have a responsibility to sell i believe hes going to be in davos where i imagine theyre going to talk about that. Details starting to emerge from the president s pending infrastructure plan. For more on that lets bring in governor ed rendell. He is the former governor of pennsylvania and the cochair of rebuilding americas future. A plan to try and build infrastructure rendells cochair, ray lahood governor rendell, secretary lahood, thank you for being here secretary, lets start with you. We have heard so much about infrastructure in theory its the kind of thing that you could get both sides of the aisle to agree on but when it comes down to details it could get sticky the big problem is not what to fix
Everybody Knows<\/a> a bridge, a pothole, a road that needs to be fixed. America is just in a state of terrible repair. Roads are crumbling. Theres 60,000 structurally deficient bridges right now. The problem for congress, i served in congress for 14 years, how do we pay for it theres no money the
Highway Trust Fund<\/a> is broke. There really is no money i think part of the dilemma for the
Trump Administration<\/a> is how do we pay for it were talking billions and billions and billions of dollars. Now ed and i have been traveling around together for about four years promoting the idea of raise the gas tax, do infrastructure through three ps,
Public Private<\/a> partnerships, give states more opportunities for willing to but we have to raise the gas tax. That is the pot of money that built america. Thats the potof money that built the interstate system over the last 40 years and it hadnt been raised since 1993 now you tell me one thing that hasnt gone up since 1993. The gas tax. Right. And with prices as low as they are, nows a very good time to be doing it you could create a huge pot of money, couple that with
Public Private<\/a> partnerships, infrastructure bank, willing to, boom, youve got a pot of money that can really fix america. Governor rendell, we have spoken with you plenty of times over the years about this. It seems like a relatively common sense idea, but when ive spoken with senators and congressmen about it, they say, okay, whos going to go first . Theyre all a little afraid to say, yes, im the one to support a higher gas tax what happens we should all hold hands and jump off the bridge together look, the
American People<\/a> are about 5050 split on whether we should raise the gas tax, but its interesting, on referendums for specific transportation projects theyve won over the last ten years 75 of the time even though theyve all called for either increased taxes or increased willing to the
American People<\/a> are not dumb they know you get what you pay for, and the average person, according to the texas transportation institute, loses 800 a year because of our inferior transportation infrastructure you hit a pothole and lose one tire and thats twice as much as youd pay if we increased the gas tax 10 cents a gallon and indexed it to inflation. Rays right, weve got to look at that, but thats a shortterm fix and only produces a quarter of a billion dollars we need much more. I think the longterm solution is a federal capitalbudget the federal government is the only political subdivision that doesnt have a
Capital Budget<\/a>. No
Major Company<\/a> doesnt have a
Capital Budget<\/a> because if you put transportation infrastructure and other infrastructure like water, sewer, electrical grid, if you put them in the operating budget they compete with health care, military, theyre always going to be under funded
Capital Budget<\/a> is the way to build longterm assets. That makes perfect sense, but again getting back to that, how do you get that through congress at this point when every single day we hear about the battles on spending more for health care versus spending more for defense . Theres not enough money to go around right now, so the idea of creating a new pot well, the
Health Care Problem<\/a> solvers caucus, a group of republicans and democrats who meet regularly they endorsed the
Capital Budget<\/a> so i think weve got to differentiate between spending and investing in longterm assets infrastructure is an asset that protects our public safety, that, in fact, makes us more economically competitive by the way, its the best creator of wellpaying middle class jobs in manufacturing and construction itself than we have the best creator if we did an infrastructure revitalization plan in this country we could create four to five million wellpaying jobs that pay between 60 and 90,000 a year. Its a state issue but i wonder if its going to be a model for others i dont know if you saw the report in the new york times, congestion in brypricing, this a that cuomo wants congestion in pricing below 60th street. Whats interesting, it goes to whether you want to 12 bucks. It would be very expensive, 12. 25 if youre a truck. Beyond that, it was how technology has changed the plan, which is to say that now that theres technology literally with cameras that can go on your license plate, you dont need big toll booths, you dont need all of these other you can charge every car you talk about a gas tax, could you have some kind of willing to tax using technology thats completely different from the way we have thought about this before no, no, its a good point many states are doing it my home state of illinois is doing it virginia is doing it virginia just went to congestion pricing, particularly along 66 from the dulles corridor down into washington. Thats expensive, too. Its very expensive there was a big uproar about it, but look it, if you want to get someplace faster, youre going to have to pay for t. If you want to get around the city of new york, youre going to have to be able to pay for that and it does raise an enormous amount of money. If you look at
Governor Cuomo<\/a>s plan, what hes going to do is reinvest that money back into infrastructure in new york. Let me ask just from looking at it, from hearing the details that are just starting to come out. Right. Just hearing the numbers on these things when i heard 25 for a truck to be here i suddenly thought, wow, is that going to make this a less attractive place for businesses are you going to be inadverte inadvertently making it so expensive to be here that you make it less desirable for companies to locate here for workers to want to be able to come were going to find out i mean, that you know, part of the idea is implement a plan like this, see if it relieves congestion but also if youre putting the money back into infrastructure, thats what people are really looking for, and infrastructure drives the economy. It creates jobs for people who build the roads. It also creates economic corridors,
Economic Opportunities<\/a> for the people that are using it. You know, i come back to the point, and governor rendell, ill throw this to you, i come back to the point that this makes a lot of sense you all have been talking about this for many years. Youre able to get the bipartisan commitment from the problem solvers caucus, and yet it seems like nothing has been done in that time. Why . Well, it basically takes president ial leadership. I was pretty hopeful during the campaign when candidate trump said he was going to have a 1 trillion infrastructure plan its a little light. It should probably be double that it would be a good first step. What the president has to understand is you cant rely solely on the private sector. 20 federal his plan and 80 state and its not going to work. Its not going to work because the private sector justifiably wants a return on their investment take those 60,000 deficient bridges that ray talked about. Only 100 of them get enough traffic to support willing to. Willing to would, of course, produce a reasonable rate of return on an investment. Whats going to happen to the other 59,900 bridges that cant support willing to the state and federal government have to pay for those revitalizations. By the way, states have stepped up in the last three years, 25 states have raised the state gas tax including some of the reddest states in america. You know, i really agree with ed on this if the white house decides that this is a priority, and theyre theres a big debate going on in the white house about this, how to pay for it, boom, something will happen. You know, congress wasted so much time last year trying to figure out what to do about obama care and in the end they passed the tax cut at the end of the year, but the bottom line is now theyre talking about introducing an infrastructure plan and if
President Trump<\/a> comes out full force behind this with the white house, we have we have an opportunity if he comes out full force with the plan that theyre talking about, 20 federal funding, 80 from the states and private, ed says that you know what, theres a big debate going on right now. The reason they havent come out is because theyre debating whether thats the right formula or not. What do you think the right mix is i think the right mix is raise the gas tax, use give states more willing to opportunities, create an infrastructure but the mix, 80 20, 20 80, how would you break that down . Needs to be i like eds idea. There has to be a real commitment from the federal government to invest in infrastructure the way that we did over 50 years when we built the interstate system. The way this region did when it built these huge bridges and other infrastructure here. It has to come from the federal government when you go to europe and asia and china and see all new infrastructure why . The
National Government<\/a> made a commitment to do it. Theres just theres not enough money in the states to do it. Governor . Can i say one last thing, becky . Sure. We say theres not enough money. Lets repeal the
Real Estate Developers<\/a> tax rate that was in the tax plan that was 340 billion over ten years. Thats more than increasing the gas tax by 10 cents. Do both of those and we have a robust federal investment at 60 of the billion let the states pay 25 , the private sector pay 15 and were in business. You sound like
Governor Cuomo<\/a> whos coming up with some ideas that he wants changed in the tax legislation, too, to go after private equity and some of the tax considerations theyve had. I think
Real Estate Developers<\/a>, the last time i checked, they do pretty well all right governor rendell, secretary lahood thank you guys for focusing on this. This is important stuff. We appreciate t. We hope we see some progress. Thank you very much. Thank you. When we come back, well talk ibm earnings and then the candy man of cannabis was supposed to make a ton it turns out regulations are a real buzz kill squawk box will be right back. The candy man can candyman cause he mixes it with love and makes the world taste good us. Its what this country is made of. But right now, our bond is fraying. How do we get back to us . The y fills the gaps. And bridges our divides. Donate to your local y today. Because where theres a y, theres an us. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new
Digital Products<\/a> and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back, everybody. Ibm ending more than a fiveyear long streak. The dow components
Fourth Quarter<\/a> earning sales both coming in above expectations ibm says it took a onetime charge of 5. 5 billion as a result of the recent tax reform. Heres what sbp
Martin Schroeder<\/a> told
Cnbcs Jim Cramer<\/a> on mad money last night. First half to second half which we described back in july kind of played out as we said. That put us on a good base we guidedtowards growing revenue and stable margins when we think about the transformation of ibm id say that, yes, now the portfolio is transformed and weve got some momentum going into 2018. Joining us right now for more on whats been working at big blue is daniel i wves. Thanks for being here. Great to be here. Do you agree with him, that the turn the corner has been turned essentially yeah, id say partially true. 50 of their business, big data, ai, analytics. I mean, thats grown mid teens thats really been the positive story. The problem is the anchor on the ship the traditional businesses, declining, margins have declined thats why right now 2018 is really a make or break year in terms of this transformation and shift. I view this as a small step in the right direction but it does really show some of the wood that they need to chop ahead. Were going to see ginny next week one of the questions we were talking about in the last hour, she used to talk about empty calories, what she called empty calories revenue meaning we dont need that because were going to get this better version of revenue the question is is the better version of revenue a higher margin or not . Ultimately, its a higher revenue. You look at big turn around stories, microsoft, adobe b, cisco. They cut businesses that werent working or sold them off ibm has done a great job to get to this point after many bumps in the road. Really now its about like can they get that over 50 , 55, 60 , that growth business, the strategic imperatives. Thats really going to be the question theres no doubt, i mean, patience is wearing thin among investors. Youll see stop and go, kneejerk reaction now its really about 2018 if they cant turn this around and start to see steady growth, i think thats where theres a lot more question marks than answers. We have an analyst earlier today who said really the big question in his mind is whether you can actually see improving margins in these new businesses. Will they ever live up to the margin potential that you had in the old businesses what do you think . They had a bonanza in terms of margins back then they were the only game in town so youre never going to get back to that sort of in those days its a new ibm its a new creation in terms of what margin can be here. Can they increase it, 100, 200 bits per year. Thats what they need to do to see the stock move higher. One of the hot things that theyve got involved in, we got involved in early to their credit has been the blockchain again, when we were speaking to an analyst last hour he said blockchain, there will be no money. His view was theres no money in blockchain, at least for the short term it sounded great on a press release and its great to sort of promote it. The reality is that and t 2 get you a cup of coffee on the street the reality for ibm, can they grow the core business the traditional business is declining and margins are starting to repeat i do view it, start to see a turn around story, but if you look at the core turn around stories in tech, microsoft, adobe, i could say cisco right here in terms of what theyre doing, there needs to be some tough decisions whether its acquisitions, whether its divestitures those are some of the tough decisions that the management teams going to need to make there. In terms of price, were looking at the stock at 164 today. You said investors have lost patience you will see kneejerk reactions up and down. Whats a price thats a good entry point . Look, i think if they the next few quarters continue to show this type of growth you could see 175, 180, 185 stock to see that 200 plus, theyre going to need to do something strategically different on that core business and or show that theyre willing to make some of the tough decisions on the margins, on that core business whether its more restructuring and or acquisitions to show the change of story. I view it as this is the feather in the cap but ultimately you really can see if this turn around is going to be successful for another two or threequarters on the strategic imperative does it cross over 50 growth . And thats really going to be the key. Your price tag is 175 to 185 even if they dont do some of these acquisitions thats still more than 164 would you tell people to buy more thats why we have a buy rating i view this. If you look at the valuation, more than can go right than wrong over the next few quarters for ibm. Its a turn around story, cheap in tech. Ultimately, as you getinto the second half of 2018, thats where the rubber meets the road to sort of make that next leg higher you know, with the 2 in front of it from a stock perspective. Whats your favorite stock in world coverage favorite stock is amazon. It continues to be our thesis is, it has been for the last few years, if you look at what theyre doing consumer, we believe 50 retail commerce went to them. For the holidays . For the holidays. Aws looks massively strong look at whole foods, tip of the iceberg to health care and pharmacy firming out that iron grip from a valuation, if you look at amazon right here where is it going to be okay boston is three to one on this. On the odds already yeah. Boston is three to one. Where are you getting the odds carl tweeted this out carl is the odds maker on this no. He found an irish book maker called 3patty power. Boston 3 to 1. Atlanta. Atlanta transportation hub. Georgia, georgia tech, augusta. Schools and transportation. Its the island and its geographically about as far away in the country as you can get from seattle. Savannah. Have you been to savannah, sorkin i have. How long is a direct flight from seattle all the way to atlanta . You want it to be far away, dont you . Yeah. It hits boston, schools. East coast presence, transportation hub. Yeah. Engineering. You think its more likely atlanta than boston . Oh, yeah, we do. You do . Yeah, we do i mean, our call has sort of been atlanta, raleigh is sort of the two that sort of stick out. Kind of like newark look, you never know, but i tend to think newarks further down the list. Thanks for coming in, dan. Thanks for having me. Excellent coming up, the cannabis confection industry is drowning in candies regulation and rule changes in california making it hard for companies to keep their head above the chocolate river. That story is next as we head to break. Heres a look at european markets at this hour theyre green. Im a
Small Business<\/a>, but i have. Big dreams. And big plans. So how do i make the efforts of 8 employees. Feel like 50 . How can i share new plans virtually . How can i download an efile . Virtual tours . Zipfile . Really big files . In seconds, not minutes. Just like that. Like everything. The answer is simple. Ill do what ive always done. Dream more, dream faster, and above all. Now, ill dream gig. Now more businesses, in more places, can afford to dream gig. Comcast, building americas largest gigspeed network. When it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential
Investment Opportunities<\/a> in real time. Fidelity. Open an account today. Fidelity. The markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Whats
Critical Thinking<\/a> 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 regulations are a big buds kill for companies trying to cash in on californias decision to regulate marijuana. Aditi roy joins us. Reporter good morning. We are here at a cannabis laced chocolate and candies factory. Theyre putting new labels over the old ones to meet brandnew state requirements for packaging. One of their most popular items here are these petra mints theyre popular as hamam mints because they come in micro doses. One has 2. 5 milligrams of thc. Its designed to give their users a little bit of a buzz, maybe take the edgeoff without making them high by doing so, theyre going after the first time user, millennial parent to supplement or substitute their wine at the end of the night they are going after the firsttime user. They expect to double or triple their revenues they have a lot of regulatory hurdles to overcome. For one, to meet new packaging requirements, kiva had to double its packaging staff. They can only supply to other recreationally licensed companies. Since most havent received the permits, kiva is only supplying to around 100 dispensaries versus the 1100 on their roster doing medicinal. Also a lot of
Edibles Companies<\/a> are having a dosage of their products and theyre scrambling to do so kiva is not in that boat they say in order to fully ramp up, it will take about a year. Back to you. Coming up, thanks, aditi,
Hakeem Jeffries<\/a> of the house judiciary and
Budget Committee<\/a> will join us to talk about last nights vote, whats going to come up. And then later this morning senator rob portman will be our guest. Stick around for those interviews squawk box will be right back. Nobodys putting their money into equities. Theyre not investing in commodities or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo,
Something Wonderful<\/a> can happen. Those people might just get what they wanted out of life. Or maybe even more. nadia white the moment a fish is pulled out from the water, its a race against time. And keeping it in the right conditions is the best way to get that fish to your plate safely. dane chauvel sometimes the product arrives, and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. tom villa we took our world class network, and we developed devices to track environmental conditions. This device allows people to understand whats happening with the location, but also if its too hot, if its too cold, if its been dropped. Its completely unique. dennis woloshuck if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. Who knew a tiny sensor could help keep the food chain safe . Shutdown showdown. The house passes a
Government Spending<\/a> bill but will the
Senate Follow<\/a> . Well ask senator rob portman when he joins us. Wall street on high alert. Investors watching closely as the drama unfolds in washington. What the debate in the halls of congress means for your money straight ahead. Plus, the tale of two dow components the inside line on ibm and ge as the final hour of squawk box begins right now live from the most powerful city in the world, new york. This is squawk box. Good morning and welcome back to squawk box here on cnbc live from the
Nasdaq Market<\/a> site in times square im joe kernen along with becky quick and
Andrew Ross Sorkin<\/a> the futures are bouncing back a little bit from yesterdays, what, 90 points or so on a percentage basis not a lot, but unusual for this year and in recent memory. Were up about 13 on the dow, up 4 on the s p, the nasdaq indicated up about 19 and threeyear highs on the yield on the ten year when it got about 2. 65 at one point its 2. 63 right at this hour. Among todays corporate top stories, ibm shares are under some pressure this morning tech giant posting better than expected earnings. Revenue increase for the first time in 23 quarters. But, theres a big but in all of this, a cautious forecast is giving investors reason for some worry. That stock down 3 in the free market we talked a little bit with a couple of analysts about whats going on there also,
American Express<\/a> reporting its
First Quarter<\/a>ly loss in the
First Quarter<\/a> when suggested earnings did beat the street they will suspend its
Share Buy Back<\/a> program for six months to rebuild capital following tax law changes in the u. S also, softbank is now the largest stakeholder in uber. Softbanks investment deal closed yesterday bringing its stake to 15 including a
Large Purchase<\/a> of sales. Discounted valuation of the company at 48 billion thats a 30 discount from the most recent valuation up 38 billion. However, they did put in a billion dollars into the deal at that 68 billion valuation so the public valuation will still stay at 68 maybe the real valuation is somewhere in between the real deal changes governance including the addition of
Board Members<\/a>. We should mention getting above 1. 4 billion out of the company after his sale with some of these shares. Now to washington, the house passed a kick the can bill last night to fund the government for at least another month the senate has to act on that bill by midnight tonight to keep the lights on in washington. Kayla tausche joins us we get closer to that deadline. Reporter we are, becky the shortterm funding bill is in limbo
Top Republican<\/a>
Mitch Mcconnell<\/a> add journg unt adjourning until 11 00 a. M mike rounds of south dakota has gone from no to yes but nearly a dozen democrats are still needed to pass it the president acknowledging as much in a tweet weighing in saying, quote, they want illegal immigration and weak borders shutdown coming . We need more republican victories in 2018. Last night
Top Senate Democrat<\/a>
Chuck Schumer<\/a> suggested two potential resolutions. Strike a deal before midnight or fund the government for just a few days but not 30 in order to buy some time to get a deal. Mcconnell, the republican leader, said a deal brokered on capitol hill might not fly with the white house. The presidency under our constitutional system is not irrelevant he he is the person who signs things into law. For most of us in the house and senate on the republican side, were interested in what his views are and those have not been made fully apparent yet one republican no, jeff flake, said the only way to know the president s views pull the an immigration bill on the floor and pass it. Becky, well get a better sense in just a few hours when the senate does convene where this is going and how close theyre going to cut it to this deadline tonight. Kayla tausche. Joining us now to talk more about all of this is new york congressman
Hakeem Jeffries<\/a>. Congressman, thank you for being here today. Good morning. Thank you for having me on. You are a democrat. You represent a district from brooklyn and you are not somebody who voted with this plan yesterday that was passed by the republicans in congress, but you did sit down with two other congressmen and pen a letter to 168 of your colleagues have signed off on that you sent to the president what was the gist of that letter the gist of the letter is that were prepared to govern, sit down with our colleagues on the other side of the aisle in the house, senate, eventually of course the president to negotiate a bipartisan spending agreement that deals with the priorities of the
American People<\/a>, not just in red states or blue states, not just for people on the left or the right, but for
Everyday Americans<\/a> and this temporary spending agreement that was passed in the house last night is just another example of irresponsible governance failing to meet the full priorities of the
American People<\/a> simply to meet a political agenda or to do what you think is palpable to the right wing
Freedom Caucus<\/a> of the
House Republicans<\/a> inherent in the congress, and that is not a sufficient way to govern congressman, those of us who sit outside the beltway have watched this play out for years at this point where budgets are never put together in time, they are never approved in time, that there is this piecemeal kind of pay as you go month at a time situation and frankly to most of us it looks as if this is partisan politics on play on both sides all of the time when you
Start Talking<\/a> about what really matters to the people who are the average americans, what are you talking about . What are those issues . And is this really a situation where you cant take politics out of the mix well, in our view, for instance, in this temporary spending agreement there was a failure to fund safety net hospitals which are of particular importance to the poor, the sick, and the afflicted who may not necessarily have private insurance and rely on safety net hospitals in order to meet their or their familys needs when they face an
Urgent Health<\/a> care crisis that was missing this particular spending bill failed to fully
Fund Community<\/a> health centers, which are also an important entry point for people, working families, moderate income folks who are struggling who may be faced with sudden sickness and affliction that was not dealt with. The
Childrens Health<\/a> insurance program, which should have been permanently reauthorized, was just reauthorized for a few years. Again, not a serious effort to deal with a program thats important be to the
American People<\/a> weve seen wildfires and hurricanes afflict people in texas, florida, the caribbean in terms of the u. S. Virgin islands and puerto rico as well as of course out in california and most recently mudslides. Sure. There was no effort to provide assistance to those people as well thats why this was inadequate. Those are all valid budgetary issues the main reason is daca, deferred access for the children who were brought here. While that is an issue that tends to find bipartisan support, it is not a budget issue. Is that something you think should be wrapped up in the budget negotiations . I think as we laid out, its an issue we need to deal with as a congress whether its resolved in the specific context of the spending agreement is up for negotiation, but it is a priority the president triggered this daca crisis. Theres significant agreement across party lines within the country, and even to some degree within the congress that we need to provide a permanent resolution of the d. R. E. A. Mer situation. These are young people who were brought here involuntarily and who essentially have contributed as best they can to the great country that we all have and should be given
United States<\/a> citizenship, and this
Bipartisan Legislation<\/a> to support that effort that has been put forward that would pass the house and the senate if its given a vote. For political reasons that hasnt occurred, and thats problematic. Congressman jeffries, i want to thank you for your time we would like to see issues where politics are put aside good luck with that. Thank you very much. Coming up when we return, throwing out the flag. Were going to show you what the sec just said about bitcoin that could have a major impact on the crypto currency. Youre looking at the price tag there of bitcoin hovering around 12,000. Its absolute confidence in 30,000 precision parts. Or it isnt. Its inspected by mercedesbenz factorytrained technicians. Or it isnt. Its backed by an unlimited mileage warranty, or it isnt. For those who never settle, its either mercedesbenz certified preowned, or it isnt. The mercedesbenz certified preowned sales event. Now through february 28th. Only at your authorized mercedesbenz dealer. Wow record time. S. At cognizant, were helping todays leading
Life Sciences<\/a> companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading companies see it and see it throughwith digital. You know whats not awesome . Gigspeed internet. When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Welcome back to squawk box. Futures in the green take a quick look. S p in the green its down about 14 points on the dow. After being down 90 or so yesterday. Dragging industrials this morning. Its down a lot based on margin worries. Yeartoyear
Revenue Growth<\/a>. Making headlines, the
Trump Administration<\/a> is considering
San Francisco<\/a> fed president
John Williams<\/a> play the music. Okay. Jaws. Theres the important background. People dont remember jaws. We can do jurassic park, schindlers list. Star wars, inanna jones, close encounters. Doesnt stop us. John williams, that
John Williams<\/a>,
San Francisco<\/a> guy for the chair, vice chair of the
Federal Reserve<\/a> according to a report in the wall street journal that it wasnt clear if williams is the frontrunner other candidates we have a problem with because we wouldnt be able to play any music for these guys, i dont think, apparently these guys are in the running, theyre squawk box guests pete pimco, former bush economic adviser
Larry Lindsay<\/a> and mohamed al
Arianne Williams<\/a> said he would welcome opportunities to contribute at the highest level. Well let you know i hope its him. I do well continue dont you think that its a, you know, multisensory experience. You can do audio, you can do video and you can do all of these things dont you think it helps us . Saving private ryan and harry potter. Did you know that, sorkin yes think about his assignment, from a big and when you hear it, it those are the scores that we remember. It transports you back to how you felt when you were watching e. T. Heres jurassic park. How many scores do you know that he didnt do . No. Dont you see sam neil arent you excited that youre going to this theme park dont you feel it all right now, andrew i do. You know you cried at
American Airlines<\/a> commercials. Im trying to get a tear right now. Car commercials. Car commercials. Where they bring it home. Yeah. By the end of this year iea. Federal regulators sec questions for bitcoin etfs bitcoins volatility and its potential i will liquidity it was not transparent enough for it to be able to regulate it take a look at the bitcoin price that were seeing today which was hit pretty hard when south korea said it might ban bitcoin. This morning you can see theyre up the price of bitcoin up across the board futures that are trading on the cboe are just under 12,000. Ratings announcing that it will begin issuing letter grades attempting to bring financial rigor to the volatile class. Joining us for more on all of this is martin weiss i called you weiss good morning to you. Good morning. Explain how you would apply the letter gradings. Well, its very important for investors to have some sanity and something to ground them. Right what weve done is built a model, computer model, that looks at crypto currencies from many different angles and provides a rational reason,
Rigorous Research<\/a> that investors need so desperately in this space. Give us themetrics that youd be using that would apply to bitcoin, aethereum, aethereum classic and how that would be different. Well, we break our model down into four submodels. Each one looking at a totally different aspect of this of crypto currencies. First is a risk index, which gives investors an indication of how much down side potential there is based on a whole series of metrics the second, the counterpart to that, is our reward index that looks at potential return from many different perspectives. All of that is nothing terribly new in the financial industry. You can provide the same kind of metrics to etfs or stocks. Where we go into
New Territory<\/a> is in our technology index, which looks at the underlying source code and how robust it is, how flexible it is, how scaleable it is and then finally the fourth and perhaps also very important measure is what we call our fundamental index, which is about adoption and security its great you can have a
Great Technology<\/a> index, everything all the pieces are in place for a very nice, strong currency, but unless its actually reality tested in the marketplace, it may not succeed and thats what this last fourth index addresses, how much is it being used, how its performing in the real world in terms of transaction speed and so forth put all those four together and you get a letter grade from a to f. Okay. So whos got an a and whos got an f well, were announcing our ratings on january 24th, this coming wednesday, and at that time, im sorry for the suspense here, we will have our grades available to the public and i expect there will be a lot of unhappy people in certain sectors and a lot of happy people in other sectors. You know, this is not about jaws. This industry is not about harry potter, its star wars. Theres a tremendous battle going on between old generation, first generation crypto currency and blockchain and second and third generation, and so thats why who wait until january 24th will anybody be getting an a its very possible that one or two coins will get an a, but the tremendous volatility in the market, especially in the last few weeks, is causing the model to look at them again and very possibly downgrade those as. Martin, thank you, appreciate it. Before we release thank you. All right. When we come back, google makes a big bet on china we have the details next and then next week, dont miss a terrific lineup of guests who are going to be joining us in davos in the snow from the
World Economic<\/a> forum is that next week it is were ready to go. Among our head liners next week, ceos of jpmorgan, citigroup, and goldman sachs, steve schwartzman, steve rubin
Steven Mnuchin<\/a> and many, many others. No. That is good. That is good. Just wait. Stay here. You are watching squawk box on cnbc two,that was awful. Why are you so good at this . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom thats lesson one. Education to take your trading to the next level. Only with td ameritrade. Ow you might take something for your heart. Or joints. But do you take something for your brain. With an ingredient originally found in jellyfish,e prevagen is the number one selling brainhealth supplement in drug stores nationwide. The name to remember. Theyre not investing in commodities or fixed income. What people areally putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo,
Something Wonderful<\/a> can happen. Those people might just get what they wanted out of life. Or maybe even more. Welcome back to squawk box. Take a quick look at the futures right now. Want to show you whats going on we have some green arrows across the board. Things have turned around the wrong direction. We did have green arrows across the board. Dow looking like its going to open down 30 points, guys. Remember, we were up quite surprisingly earlier this morning. Nasdaq looking to open up about 7 points s p 500 well call it under. Google with licensing with
Chinas Tencent<\/a> licensing. This is googles first deal with a
Major Chinese<\/a> tech company. In other corporate news,
Berkshire Hathaway<\/a> ajit jain reports 109 million in the companys stock. Jain is seen as a possible successor for warren buffet. Now that hes been added to the board, along with greg able, they have to disclose all of that, and over the years hes built up 109 million in ownership shares of berkshire. Pretty thats much more than i have in berkshire. Particularly when you consider berkshire doesnt issue shares anything he got he paid for himself. Much more much more than me. Its not even not in the club. Not even comparable russian leader
Vladimir Putin<\/a> is shirtless whoa think if i missed an r taking a dip. Taking a dip in the frigid cold waters of lake selega part of a celebration of epiphany. Wait a second, epiphany was january 6th. Yeah. Maybe it was some kind of awak awakening. Its the ort thouhodox church they emphasize the physical fitness of the president he is fit. Im i, like have, most of my bathing suits are two piece at this point. No berther controversy there. Coming up when we return, joe kern kernen, potentially shirtless . No, no, i said its a twopiece suit. Ibm breaking a long string of revenue declines chalking up its first verenue declines when we talk to a
Top Executive<\/a> next. Good morning, everybody. Welcome back to squawk box here on cnbc we are live from the
Nasdaq Market<\/a> site in times square. Among the stories front and center, one economic report on todays
Calendar University<\/a> of michigan will be out with the january
Consumer Sentiment<\/a> index that hits at 10 00 a. M. Eastern time. The number is expected to come in at 97 that will be up from the 95. 5 reading we got at the end of december shares of
Home Improvement<\/a> retailer lowes are on the rise this morning lowes agreed to add two new members to its board of directors and will be nominating another at its annual meeting. All of this is as a result of talks with d. E. Shaw and the stock is up 2 . Delta airlines is tightening rules for passengers traveling with service and support animals. Delta will require passengers to present documents outlining why they need those animals as well as paperwork showing training and vaccinations delta says the number of animals on board its flights has jumped 150 just in the last two years. In news just crossing, the cftc charging
Patrick Mcconnell<\/a> of cabg tech with
Virtual Currency<\/a> fraud it alleges it received funds and ceased communicating with customers and removed the website. Theyre out. I think this whole crypto currency mania, were going to see scandals and schemes. Yes right. They answered the other day, andrew well, no, you cant sell it for money but you can sell it for other crypto currencies. That sends like ten over value cats for ten over value dogs im not saying that. Like certain mergers, stocks that have gone up a lot. Im not saying thats what bitcoin is, but its the could you make a lot of money and cash out . You can do that, cant you it costs a lot. No, the problem is youd have to do it very slowly, meaning you would not be able to you better watch what youre saying. If you had 10 million you cant take and you wanted to get rid of your 10 million at 10 million today, that would be a challenge. Really . Okay well move talking about bitcoin so much. If you want to trade your bitcoin for aethereum, your 10 million, theyll make that happen. Thats what i mean. Among todays big stocks to watch, ibm the shares are affecting the dow at this point down almost 6. Were joined with the inside line can you just after you finish the inside line can you give us some of the stuff on the outside line, too, just so we have the complete picture, deidre. You dont know anything about the outside line you only have the inside line. Well go through those numbers first. The big picture, you mentioned the drop in premarket trading that comes despite ibm breaking the years streak of winning revenue. They had good momentum going into the report up 10 over the last month still couldnt convince investors. Some analysts saying this could be a onetime increase you were talking this morning about strategic imperatives. This is ginny romettys imperative watson and ia are making up the total revenue. Gross margins are shrinking. Still, ibms former ceo and svp of
Global Markets<\/a> is telling cnbc the turn around is in the works. The transformation of ibm, yes, the portfolio is transformed and we have momen m momentum. He talked about blockchain. Ibm is not making money off of the imperatives. Ibm may have a new challenge in the year ahead tax reform thats expected to raise its tax rate guys deidre, thanks. Ibm looks like amazon compared to ge. Ge shares hitting a sixyear low this week. The latest chapter in the stocks 45 decline over the past year. Joining us now with where the conglomerate itself can go from here,
Senior Analyst<\/a> covering the multianalyst sector heres the company and heres the stock. Not only was it a 45 decline but it had before the last year it was the worst performing dow component over the past 10 or 20 years. Trading trying to get it above 30 with all the financial finagling and stuff, remember . So it dropped from 30 to where it is now so the regular market goes drops 40 , you cannot overstate how absolutely pathetic the stock has been. Anybody who has held it should get fired. Anybody thats invested with them, they should fire them, shouldnt they the news has been all bad and its very near term. The stock is already down 11 this week. Its looking pretty grim right now for ge. Its not that far from its it was 60. It got to 6 during the financial crisis and now its at 17 again. Thats got to be by far the worst performing. Yes. Okay. So no surprises now theyre talking about how do you even break it up. Is that feasible so this has triggered a as of this tuesday, for the first time the new ceo brought up the idea of doing a wholesale reset of the business model. All divisions around the table they talked about
Public Company<\/a> structure. So this did trigger all kinds of speculation of what ge would look like once this type of breakup was entertained, and it brings up all of what the valuation could be on sum of the parts basis. So 16 thats another new low and what could it be at this point . Is it worth more than 16 broken up so by our estimates its not much more than 16. Our sum of the parts model coming into this week pegged it at an 18 at a fair value on a sum of the parts thats a little bit different from what you say with the breakup value is because then you start and need to look at the dissynergies and whether youre going to true up the pension. It becomes a lot more complicated. I dont know how to approach this subject, but when it was at 28 and 30, it appeared to be fair value 235ifairly valueda multiple bases on the numbers they were posting. Were those numbers real that they were posting . Did things in energy back to energy did things sour in their businesses since then or were they painting a picture that was not exactly factual with their underlying fundamentals . Are they allowed to do it that way . Sure. Its an important question if you had to point to what has gone wrong, fundamentally its been poor
Capital Allocation<\/a> decisions, whether it was the rampup of ge capital in front of the financial crisis, whether it was buying oil and gas assets right before oil demise. The investment in alstom, largest acquisition they have ever made in november. They declared it a big we thought all of those things were going okay thats the thing it looked like they were buying high and selling low but it didnt come home to roost until new management got in there. Yeah. So that was a first. Capital allocation decisions that have been questionable. The second element to this, joe, youre touching on this, this is the investors are seeing the disconnect between reported earnings and cash flow and the hallmark of wellrun multiindustry companies, when you see more cash flow than reported earnings, and its been just the opposite for ge, and were still trying to calibrate how bad the cash flow situation is. Destroying shareholder value is not in violation of the sec, right . People do that all the time. Bad decisions. People do that all the time is that what were talking about here were not talking about something that may be correct. The sec battle lines, are we . Maybe theyre broke. Maybe youre in the gray area of misleading. What were dealing with is trying to calibrate what is the new reality of the cash flow situation. You used the word misleading. Where misleading is a problem . So its the point of which months ago when jeff immelt was in the seat we had updates on alstom and everything going well roll the clock forward in november the new ceo looks at the group and says, lets face it, alstoms been a big disappointment how you go from everything going well to a big disappointment, last year there was no insurance reserve that we had to talk about and then as of tuesday theres a 15 billion how did that happen you listen to the
Conference Call<\/a> everyone was asking that deane, ive heard from the industry this is the worst piece of news theyve heard yet. You should have been able to figure out that you should have been putting the reserves aside. Plenty of people should have known that. To put some framework on how big a negative surprise this was, we have been thinking something on the order of 3 billion charge and that was in the beginning of november and the actual cash number theyre going to have to pony up is 15 billion, five times bigger if thats coming out of ge capital. Theyre forced to suspend the dividend indefinitely on ge capital. Can you think of any innocent reason that the numbers would grow that quickly that easily or do you suspect people were turning a blind eye to this . So this all goes back to how do you look at these reserves and within the insurance itself, the mortality rates. You would have those numbers, they didnt happen overnight you didnt get to 15 billion overnight . So as an analyst were not privy to what those underlying assumptions are. But the company would be . Exactly very quick. Do you trust these people . We do trust the management and how theyre communicating, especially today you know, some of the information that theyre giving us is hard to digest in terms of how different it was and how much the stock has declined but, yes, we do trust them. Deane, thank you. Comingup, when we return, it is dday for the senate to vote on the looming shutdown set for midnight we will join and speak with republican senator rob portman right after the break. And energy to fuel its growth. Real estate such as ecommerce warehouses. And private debt to finance transportation and infrastructure. Building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets. Partner with pgim. The
Global Investment<\/a> management businesses of prudential. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. Athey always refer to meade was master sergeant. Ge. They really appreciate the military family, and it really shows. Weve got auto insurance, homeowners insurance. Had an accident with a vehicle, i actually called usaa before we called the police. Usaa was there handson very quick very prompt. I feel like were being handled as people that actually have a genuine need. Were the webber family and we are usaa members for life. Usaa, get your insurance quote today. The house voting to fund the government through the end of february now what could be the hard part is getting it through the senate joining us now is ohio senator rob portman. Senator, good to see you do you know the very latest on whats happening at this point a couple republicans are out are there 10 or 11 democrats that are still a possibility here, do you know . Absolutely. I mean, look, its an unusual situation because you have a spending bill thats going to come before the senate that no one really objects to on the other side in other words, theres nothing in it they dont like. In fact, one of their highest priorities is included which is the long
Term Extension<\/a> of the
Childrens Health<\/a> care program which has to be done in a couple of weeks because some states literally run out of money its unusual that you have this kind of opposition when theres really nothing objectionable there. Theres an issue outside of spending that theyd like to have included, as would a lot of us its an issue that hasnt been resolved yet it will take time. My hope is we have 10 or 11 and enough democrats to get this across the floor today it gives us a month to be able to resolve the broader issue of immigration reform, which is something that a lot of us want to do. Its an unusual situation. I dont think it is i think thats i like the way youre saying that because it kind of assumes that theres that theres wellintentioned people, you know what i mean well, thats what you senator, they are convinced, and either side, if either side thinks that they can score political points ahead of the 2018 mid terms, for example, lets just say forex ample, lets say
Chuck Schumer<\/a> and the democrats think that the republicans are going to get blamed for all
Government Shutdown<\/a>s, thats all they want to do is shut down the government then if its going to help them in they dont care if it hurts the military they dont care if it if its you know, destabilizes the financial they dont care about any of that. They just care about scoring points and maybe doing better in 2018 and thats why everybody is so cynical and disgusted with the way things work in washington now. I think theyve found some soft ground to fight on here though this is not a good way to score political points when you look at it, it simply continues the spending, the current spending, and it adds something that has been a huge priority that a lot of people care about around the country, which is extending the
Childrens Health<\/a> insurance program. Right thats what it is theres nothing else in here. Well, how soft is thats my point though. If the ground does soften up on them to the point where they look and think it might back fire, then you might then it might pass but are we there yet . Have you guys been you know, its all about pr, getting the message out. You probably can only get the message out on one network or maybe this show. Nbcs always a good place to get that message out there you go. Talking about cnbc but i think people are smart. First of all, i think people need to know how we got here, which is that were not doing our annual appropriations bills, although ten of them were reported out with big bipartisan votes because the democrats didnt want to takethem to the floor for a vote thats also a fact so heres some facts here that are inescapable that make it difficult for this to be a good political issue. Havent republicans done the same thing in the past, senator . I mean, i guess thats why yeah. Yeah. When president obama was president , republicans also threatened to shut down government over something that wasnt related, and it didnt turn out too well, did it. Yeah, but i think this is a reminder of what happened in 2013 as republicans and democrats and say lets not take the
American People<\/a> through this. People have had enough drama the economy is doing well. Its finally hitting on all cylinders. The tax reform, tax cut is working as well as any of us expected, including our conversations about this, joe, you know, we didnt expect for this to be this kind of
Immediate Reaction<\/a> its been fantastic in terms of
Companies Making<\/a>
Investment Decisions<\/a> in terms of salaries, bonuses, 401k contributions. Things are going well. I think the
American People<\/a> are looking for a little stability lets not shut down the government, lets keep it operating, lets do a deal with the
Childrens Health<\/a> insurance program. 9 million kids and their families are depending on us with this one and lets continue the discussion on immigration. Then a cynic on the other side would say, oh, now you guys, suddenly the
Childrens Health<\/a> program is a big priority for you guys only as a bargaining chip to get this passed because i havent heard its been a priority for me for a long time. For you republicans. Called on our leadership to get it done, called on the democratic leadership because it was being used as a political chip the
Childrens Health<\/a> insurance program, it expired in september and weve been kicking the can down the road. It gives no stability. This is the right thing to do and its not a political issue its an issue that affects families and kids. I think you were were you in the room when it looked like everybody was talking rationally about immigration and then everything hit the fan in the next week. You were in the room in the first part, right . It looked like it was actually it looked like something could actually happen. Can it get back to that point where in good faith you and schumer and mcconnell and the president are actually talking about how to fix immigration could that happen . Yeah. I think so, because i think what people are asking is that there simply be that balance where we do take care of the dak da i shall daca issue which im in support of and we have the enforcement not to continue to have to deal with these issues like daca. In other words, we need to have a better system both at the border, workplace, visas i think theres a general agreement on that. Now there are some specifics obviously where weve got some differences, but my understanding is that the administration is willing to be flexible and democrats at least in that meeting are willing to be flexible. Im hopeful that in a months time we can put all of that together. Senator, local issue for you. I dont know if you saw amazon hq2 put columbus on the list. Yeah. Cleveland wasnt on the list. Folks in cleveland are writing up a storm. Folks in cleveland are not happy. I did write a letter in support of ohio, including all three sites. Im glad one ohio site ended up. Being in columbus would benefit the entire state because this is a huge investment, both in terms of amount of money invested and people and all of the suppliers. So it would be great it would be great, by the way, for them as well amazon knows that this is a state thats centrally located, great work force got a lot of
Tech Community<\/a> in columbus and so this is an opportunity for them as well. Will you be making a pilgrimage to making a pilgra r pilgrimage to seattle . I am making a pitch your home state, joe, is on the rise did you mention montgomery and the gold star, did you mention some of the there is a lot to talk about. Those are the important things would you be unhappy if it is georgia . You like that place, dont you you got some friends we got to go with the buckeye state. This is central lilo katly locad yeah, thats whats on the list and it would be a great decision for them. Dont know, you cannot get it delivered up there they probably have skyline in columbus, dont they it is not quite national but it is regional we are watching it is never a dual moment. Interesting times. But lets make it less dramatic and lets go ahead and do what we would normally do when you dont object to something in a short term spending bill and there is something positive for democrats and republicans. Lets get it done and continue this discussion and i believe that we can negotiate something and get it drafted into law. Thats the way to be handled and i am hopeful i am worried with republicans and shutdown, it is like heads republican wins and tail republica republicans lose i am hopeful with the persuasion of cnbc, within the family that this will happen i am trying to get my do you want him to shut this down i dont want him to shut anything do you think democrats are wrong on this . Why would anyone want to shut anything down . I didnt want republicans to shut things down years ago if they all stand there, they got problems senator, you may be on something, thats the soft ground thing yeah, good to see you thanks senator portman. By the way, lets take a look at the future on this friday, you can see the dow future is under some pressure this morning, this is coming from a couple of stocks that well talk about in a little bit. Ibm and
American Express<\/a> is putting that downward pressure on the futures that had been trading ghhier nasdaq is still up by 7 points squawk box will be right back. What we do every night is like something out of a strange dream. Except that the next morning. It all makes sense. Fedex powers
Global Commerce<\/a> with vast, farreaching networks. Deep knowledge of industries. And, yes. Maybe a little magic. Some stocks to watch this morning. Nike upgraded to out perform to neutral. Analysts returning to growth nike is also getting some positive mentions from telsi advisers the rail operator also says it is considering strategic deal by boosting crude equipment i wonder like all the mansions and all those sort of in the red states. Do you think there is going to be 11 . What do they do, close it or not . They love the
Childrens Health<\/a> thing they thought they love them. I thought they break one direction or the other by the way, mccain is not there. Yeah, and cochran was he there well give you an early look of the allstar line up from the
World Economic<\/a>s form in davos switzerland. Stay tuned squawk box will be right back i think we should do that meeting tomorrow. Well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading companies see it and see it throughwith digital. And made it liberating. We took safe and made it daring. We took intelligent, and made it utterly irresistible. We took the most advanced eclass ever and made the most exciting eclass ever. The 2018 eclass coupe and sedan. Lease the e300 sedan for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Notheyre not investing iney commoditiesies. Or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo,
Something Wonderful<\/a> can happen. Those people might just get what they wanted out of life. Or maybe even more. Running a
Small Business<\/a> is demanding. And thats why
Small Business<\/a> owners need more. Like internet thats up to the challenge. The gigspeed network from comcast business gives you more. With speeds up to 20 times faster than the average. That means powering more devices, more video conferencing, and more downloads in seconds, not minutes. Get fast internet and add phone and tv for only 34. 90 more per month. Comcast is building americas largest gigspeed network to give
Small Business<\/a>es more. Call 18005016000 today. Time now for your squawk of the day. The index gained 18 of the year welcome back everybody, we are off to davos this weekend. Among our lineup of guests we got the ceos of uber, cisco and j. P. Morgan and goldman sachs. So many that we cannot begin to tell you we definitely have to go now. Did you see those you know whos going to be there on friday. The president whos better to come on the show before he gives a speech. I am trying make sure you join us on monday and well see you from the alps, squawk on the street begins right now good friday morning, i am
Carl Quintanilla<\/a> with jim cramer, the
New York Stock Exchange<\/a> tonight the first since 2013, ibm and am ex earning is going to weigh the dow down","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia600400.us.archive.org\/5\/items\/CNBC_20180119_110000_Squawk_Box\/CNBC_20180119_110000_Squawk_Box.thumbs\/CNBC_20180119_110000_Squawk_Box_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240630T12:35:10+00:00"}